Measures to cool economy taking root, says China

  • Business
  • Thursday, 20 May 2004

BEIJING: China's measures to cool the economy are taking root, Vice-Premier Huang Ju said yesterday, as the central bank ruled out an immediate interest rate rise. 

China, struggling to curb an economy which grew 9.8% in the year through the first quarter, has taken a series of measures to try to slow growth, including raising bank reserve requirements three times and curbing investment in red-hot sectors like property and steel. 

But economists said inflationary pressures made the prospect of more dramatic action strong, and could lead to the first interest rate rise in nine years. 

“There are some new problems and contradictions in our economic operation. The Chinese government is taking a series of measures and has achieved preliminary results,” Huang told a financial forum. 

“China's economy will continue to grow at a relatively fast and steady pace,’’ he said. “We will continue to implement stable monetary policy using various monetary policy tools to appropriately control the money and credit scale to prevent inflation and financial risks, at the same time promoting economic development.” 

Chinese spending on roads, power plants and other fixed assets slowed in the year through April as government measures began to bite, according to data released on Tuesday. 

Central bank governor Zhou Xiaochuan told reporters the government still had to monitor prices before any decision could be made on an interest rate change. – Reuters  

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