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Zhou's remarks echo officials' caution over economic view
Source: Bloomberg News |
November 13, 2012, Tuesday
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Print Edition
Print Edition
CENTRAL bank Governor Zhou Xiaochuan has highlighted the effects on China of what he termed five years of crisis, adding to officials' caution on the economic outlook even after a rebound in exports.
"Overall our macro-economic controls have been successful," Zhou said in Beijing. "But of course the financial crisis didn't finish, and became a European debt crisis, and therefore we are still continuing to deal with it."
China's export growth accelerated in October and the nation's trade surplus swelled to US$32 billion, the highest in almost four years, a customs report showed on Saturday.
While the improvement adds to signs of a strengthening economy, Commerce Minister Chen Deming said that the trade outlook is "grim," and economic planning chief Zhang Ping said the nation's recovery needs stronger foundations.
"Policy makers are probably trying to down play the recent growth rebound primarily because of concerns on external demand risks," said Helen Qiao, a Hong Kong-based economist for Morgan Stanley. "In view of the deleveraging need in the US and Europe in the next three to five years, it is hard to be over-optimistic."
Asked about his future in the job, Zhou, 64, said that one retires at a "certain age." Zhou is China's longest-serving central bank governor since the 1960s, with close to a decade in the role, and the publication of a collection of his speeches, articles and interviews fueled speculation that he could be set to retire.
Liu Li-Gang, a Hong Kong-based economist with Australia & New Zealand Banking Group Ltd, has said he expects a replacement to be announced before the end of this year.
Zhou said changes to the interest-rate system should be at a "moderate" pace and signaled that he saw less risk from so-called shadow banking in China than in developed economies. Asked about the central bank's recent use of reverse repurchase agreements, Zhou said they were short-term and more flexible than bank reserve requirements.
In a statement, the People's Bank of China also reiterated the yuan is close to what officials describe as an "equilibrium" level. The yuan has strengthened about 2.4 percent since July 25 after a 1.6 percent decline since the start of the year.
The 11.6 percent rise in China's exports last month was above the 10 percent estimate in a Bloomberg News survey of economists and September's 9.9 percent gain. Imports rose 2.4 percent, the same pace as the previous month.
"Based on the data, signs of apparent economic stabilization and rebound emerged in September and October," said Zhang, head of the National Development and Reform Commission. "But we still can't relax and our analysis concludes that the foundations for stabilization are not solid enough."
"Overall our macro-economic controls have been successful," Zhou said in Beijing. "But of course the financial crisis didn't finish, and became a European debt crisis, and therefore we are still continuing to deal with it."
China's export growth accelerated in October and the nation's trade surplus swelled to US$32 billion, the highest in almost four years, a customs report showed on Saturday.
While the improvement adds to signs of a strengthening economy, Commerce Minister Chen Deming said that the trade outlook is "grim," and economic planning chief Zhang Ping said the nation's recovery needs stronger foundations.
"Policy makers are probably trying to down play the recent growth rebound primarily because of concerns on external demand risks," said Helen Qiao, a Hong Kong-based economist for Morgan Stanley. "In view of the deleveraging need in the US and Europe in the next three to five years, it is hard to be over-optimistic."
Asked about his future in the job, Zhou, 64, said that one retires at a "certain age." Zhou is China's longest-serving central bank governor since the 1960s, with close to a decade in the role, and the publication of a collection of his speeches, articles and interviews fueled speculation that he could be set to retire.
Liu Li-Gang, a Hong Kong-based economist with Australia & New Zealand Banking Group Ltd, has said he expects a replacement to be announced before the end of this year.
Zhou said changes to the interest-rate system should be at a "moderate" pace and signaled that he saw less risk from so-called shadow banking in China than in developed economies. Asked about the central bank's recent use of reverse repurchase agreements, Zhou said they were short-term and more flexible than bank reserve requirements.
In a statement, the People's Bank of China also reiterated the yuan is close to what officials describe as an "equilibrium" level. The yuan has strengthened about 2.4 percent since July 25 after a 1.6 percent decline since the start of the year.
The 11.6 percent rise in China's exports last month was above the 10 percent estimate in a Bloomberg News survey of economists and September's 9.9 percent gain. Imports rose 2.4 percent, the same pace as the previous month.
"Based on the data, signs of apparent economic stabilization and rebound emerged in September and October," said Zhang, head of the National Development and Reform Commission. "But we still can't relax and our analysis concludes that the foundations for stabilization are not solid enough."
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