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March 8, 2010

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Home » Business » Economy

Su sees 'easy' policy outlook

A 17 percent annual increase in China's broad money supply and a target of 7.5 trillion yuan (US$1.1 trillion) for this year indicated a relatively easy monetary policy, said Su Ning, deputy governor of the People's Bank of China, the central bank.

Speaking on the sidelines of the ongoing annual session of the National People's Congress in Beijing, Su said the 17 percent rise in the nation's broad money supply was larger than the combined increase of targeted gross domestic product and consumer price index, which suggested an "easy" monetary policy.

"If M2 (the broad measure of money supply) growth is 2 to 3 percentage points higher than the combined growth of GDP and CPI, the monetary policy could be seen as easy," said Su.

Premier Wen Jiabao said last Friday, in the government work report submitted to the NPC, that China targeted a 3 percent rise in consumer prices and 8 percent GDP growth this year.

Su believed the 17 percent climb in the broad money supply would be able to support the ongoing economic recovery throughout the country.

China's banks lent a record 9.6 trillion yuan in new yuan-denominated loans last year, almost double that of the previous year, to spur the economy amid the global downturn, but it was accompanied by soaring property prices and rising expectations of possible inflation.

Su said the 7.5 trillion yuan in new lending this year should help completion of projects under construction.


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