Su Ning, vice governor of the People's Bank of China (PBOC) said at a luncheon party on September 17 that China would maintain the "moderately loose" monetary policy in the second half of 2009 and in 2010.
He said that although the world's major economies have started to recover, but unemployment rate in the US, the EU and Japan remain high. A strong global recovery won't come very soon. The US' new consumption mode has a negative impact on China's export. China's August CPI remained below zero. For these reasons, the central bank will maintain the "moderately loose" monetary policy.
"The central bank will keep the liquidity level to stimulate economy. It will at the same time strengthen risk control and monitoring, to make sure that new loans are floating to real economy," said Su Ning.
Su noted that the PBOC would not tighten credit now. "Out monetary policy will maintain stable, although monthly statistics may be different."
He also warned of credit risks at the luncheon. In the first half of 2009, a large portion of new bank loans were issued to medium and long term projects and large-scaled enterprises.
By People's Daily Online