China has acted fast amid the global financial crisis to ease its monetary policy that is beginning to take effect, said central bank governor Zhou Xiaochuan on Friday.
China has shifted from a tight monetary policy implemented in early 2008 to a moderately easy one as the international financial turmoil spread in the later half of the year, Zhou told a press conference on the sidelines of the parliament's annual session.
"We would rather act faster and take more forceful measures" to shore up confidence "as long as the measures can check slip of confidence and spur fast recovery of the economy amid the crisis," he said.
"We have learned lessons from some countries that once the confidence dips, it needs a fairly long time to restore," he added.
Zhou, however, acknowledged the policy might lead to mushrooming in total currency supply and lending.
The increase in new loans in January was "out of our expectation", he said, noting moderate adjustment in the future could keep it in a reasonable range.
The Industrial and Commercial Bank of China, the country's largest lender, extended 117.1 billion yuan (17 billion U.S. dollars) of new loans last month, 22 percent of the amount for the whole of 2008.
Zhou Xiaochuan (R), governor of the People's Bank of China, answers a question during a press conference on dealing with the global financial crisis and maintaining steady and relatively rapid economic growth held by the Second Session of the 11th National People's Congress (NPC) at the Great Hall of the People in Beijing, capital of China, March 6, 2009. Zhang Ping, minister in charge of the National Development and Reform Commission of China, and Chinese Finance Minister Xie Xuren also attended the press conference. (Xinhua/Rao Aimin)
The Bank of China' s outstanding loans stood at nearly 1.6 trillion yuan (235.3 billion U.S. dollars) by the end of January, up 87.29 billion yuan compared with the beginning of the year.
To answer government calls to support the slowing economy, the newly issued loans were mainly given to government-supported industries, including infrastructure construction, after-quake building, mergers and acquisitions as well as technological innovations. Source:Xinhua