China fine-tunes monetary policy (2)

It is noteworthy that export growth has also dropped. Data shows that export value in September 2011 reached 170 billion U.S. dollars, which is 7.4 percent lower than that of August. Given the current economic downturns in Europe and the United States, China's export growth is expected to continuously drop in the fourth quarter.

The central bank will gradually increase the scale of the deposit reserve requirements by 900 billion yuan between Sept. 5, 2011 and Feb. 15, 2012.

The central bank has continued to increase money supply on the open market. The China Banking Regulatory Commission has also adopted relaxed lending policies for micro enterprises as well as small and medium-sized banks.

A series of changes in recent fiscal and monetary policies have shown that microeconomic policies not only focus narrowly on inflation but have become more flexible and farsighted. China is still facing imported inflationary pressure because of the uncertainties in the international economic situation and concerns about sufficient liquidity in the world.

Therefore, the current prudent monetary policy should basically remain unchanged until it shifts from curbing inflation to boosting growth, yet it should be fine or slightly tuned "at a proper time and to a proper degree."