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Policy 'fine-tuning' does not equal loosening property curbs 鈥 advisor
By Wang Yanlin |
November 30, 2011, Wednesday
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Online Edition
Online Edition
CHINA'S policy "fine-tuning" does not mean a loosening of credit controls or a reversal of curbs on China's property market, central bank adviser Xia Bin said today.
China should still stick to a prudent monetary policy stance, and the fine-tuning would target and complement areas where the financial system wasn't giving effective support due to some failures in the system, Xia said, citing examples like ensuring lending to small businesses and start-up companies.
The focus of the present policy adjustment should still be on the fiscal front, and there was room for more active fiscal policies, he said.
Xia is an academic adviser on the monetary policy committee of the People's Bank of China, and also a researcher at the State Council's Development Research Center.
"Fine-tuning does not mean loosening restrictions on property," he said, adding it was critical to skillfully engineer China's real estate market next year because it was related to investment and growth, and the country should avoid a "free-fall" in property prices.
Premier Wen Jiabao said last month that the government would fine-tune economic policies as needed, fueling market speculation that China might lower the reserve requirement ratio, or the amount of capital set aside by commercial banks as reserves. The ratio is presently at a record high of 21.5 percent, which translated into 18 trillion yuan (US$2.84 trillion), or 45 percent of China's gross domestic product, being locked in bank vaults.
China should still stick to a prudent monetary policy stance, and the fine-tuning would target and complement areas where the financial system wasn't giving effective support due to some failures in the system, Xia said, citing examples like ensuring lending to small businesses and start-up companies.
The focus of the present policy adjustment should still be on the fiscal front, and there was room for more active fiscal policies, he said.
Xia is an academic adviser on the monetary policy committee of the People's Bank of China, and also a researcher at the State Council's Development Research Center.
"Fine-tuning does not mean loosening restrictions on property," he said, adding it was critical to skillfully engineer China's real estate market next year because it was related to investment and growth, and the country should avoid a "free-fall" in property prices.
Premier Wen Jiabao said last month that the government would fine-tune economic policies as needed, fueling market speculation that China might lower the reserve requirement ratio, or the amount of capital set aside by commercial banks as reserves. The ratio is presently at a record high of 21.5 percent, which translated into 18 trillion yuan (US$2.84 trillion), or 45 percent of China's gross domestic product, being locked in bank vaults.
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