China's central bank announced on January 20 it had realized the target of financial macro-control set for 1999. The People's Bank of China, successfully increased money supply to reverse the trend of deflation last year, said Governor Dai Xianglong said a press conference hosted by the Information Office of the State Council in Beijing on January 20.

Dai said that the supply of broad money (M2) stood at 12 trillion yuan by the end of 1999, almost reaching the goal of 15 percent set for the year.

According to him, the supply of narrow money (M1) totaled 4.6 trillion yuan by the end of 1999, up 17.7 percent over 1998, and the growth rate was nearly six percentage points higher than that of 1998 and three percentage points higher than the 1999 target.

As part of the monetary policy, he said, the central bank has since 1996 reduced the interest rates of savings deposits and loans for seven times, which cut enterprises' interest expenditures by 260 billion yuan and helped stimulate the consumption of urban residents.

"The People's Bank of China has realized the target of financial macro-control that was set at the beginning of 1999," Dai said.

Dai Xianglong also said that Commercial banks will be allowed to provide security mortgage financing for security firms in accordance with relevant regulations,

He added thatChina will support the rapid development of capital market and expand the scope of direct financing.

He noted that country will support the development of industrial funds and funds for carving out a career. Sino-foreign joint venture investment funds will also be encouraged.