China to Increase Money Supply ����The People's Bank of China, the central bank, announced on October 19 that it will increase money supply in a bid to stop the trend of dropping price levels and boost the Chinese economy. ����The decision was made at a recent meeting of the central bank's Committee of Monetary Policy, headed by the bank's governor Dai Xianglong. ����According to the meeting, China's macro-financial adjustment has had its effect, as the broad money supply (M2) already increased by 15.3 percent in the first nine months, the narrow money supply (M1) increased by 14.8 percent, cash in circulation (M0) rose by 16.4 percent, and enterprise deposits were up 43.8 billion yuan on a yearly basis. ����By the end of September, China's foreign reserves topped 151.5 billion US dollars, 6.5 billion dollars more than the figure at the end of last year, while the exchange rate of the national currency has been stable so far this year, the bank said. ����The participants agreed to lower the level of financial institution reserves and work to establish an interest rate formation mechanism as required by the market economy. ����The central bank stressed that banks must give support to technical progress in enterprises, economic restructuring, and stimulating domestic demand when creating their lending policies. ����Securities firms are encouraged to enter the interbank market and should be allowed to issue corporate bonds upon the approval of authorities. ����State-owned commercial banks are required to improve the professional quality of their staff so as to provide better services to customers. (Xinhua) Economicnews 1999-10-20 Page2 Full Story in Chinese