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ReturnChina:More cooling measures unlikely
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PublishDate：
2006-09-26 15:12:00
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BEIJING, Sept. 26 -- The government is unlikely to have to take more steps to cool the economy given that fixed-asset investment is slowing and growth in property prices has eased, China’s statistics chief said in comments published yesterday.
In an interview with The Standard, a Hong Kong newspaper, Qiu Xiaohua also said steps taken to date to cool heated sectors of the economy are having their desired impact.
“As the measures that have been put into place are effective, we will continue with them and keep a close eye on their outcome to ensure better implementation,” Qiu was quoted as saying.
Growth in fixed-asset investment slowed to 29.1 percent in the first eight months of this year, compared with 30.5 percent from January through July and 31.3 percent in the first half.
Property prices rose 5.5 percent in August, compared with 5.7 percent in July and 5.8 percent in June.
China has stepped up its campaign in recent months to rein in investment growth and rapid property price rises by twice raising benchmark lending rates and the amount of cash that banks have to hold in reserve.
Many analysts predict the government may need to take more steps to cool growth if the economy — which grew 11.3 percent in the second quarter — continues to gallop ahead.
Qiu also told the newspaper that the pace at which the yuan is appreciating is “appropriate” and that it will take a long time before China reaches its ultimate goal of making the currency fully convertible on the capital account.
“This is because China has to consider a lot of things before allowing for a more flexible yuan, including the improvement of the banking system and enterprises’ ability to withstand risks,” he said.
While the yuan is convertible on the current account, which covers trade, China still restricts most capital account deals. Analysts say full convertibility could be years away.
China revalued the yuan by 2.1 percent in July 2005, scrapping a decade-long peg to the dollar and shifting to a managed float, but it is under pressure from the United States and other countries to move faster towards a liberalized currency system.
Source:Sehnzhen Daily
In an interview with The Standard, a Hong Kong newspaper, Qiu Xiaohua also said steps taken to date to cool heated sectors of the economy are having their desired impact.
“As the measures that have been put into place are effective, we will continue with them and keep a close eye on their outcome to ensure better implementation,” Qiu was quoted as saying.
Growth in fixed-asset investment slowed to 29.1 percent in the first eight months of this year, compared with 30.5 percent from January through July and 31.3 percent in the first half.
Property prices rose 5.5 percent in August, compared with 5.7 percent in July and 5.8 percent in June.
China has stepped up its campaign in recent months to rein in investment growth and rapid property price rises by twice raising benchmark lending rates and the amount of cash that banks have to hold in reserve.
Many analysts predict the government may need to take more steps to cool growth if the economy — which grew 11.3 percent in the second quarter — continues to gallop ahead.
Qiu also told the newspaper that the pace at which the yuan is appreciating is “appropriate” and that it will take a long time before China reaches its ultimate goal of making the currency fully convertible on the capital account.
“This is because China has to consider a lot of things before allowing for a more flexible yuan, including the improvement of the banking system and enterprises’ ability to withstand risks,” he said.
While the yuan is convertible on the current account, which covers trade, China still restricts most capital account deals. Analysts say full convertibility could be years away.
China revalued the yuan by 2.1 percent in July 2005, scrapping a decade-long peg to the dollar and shifting to a managed float, but it is under pressure from the United States and other countries to move faster towards a liberalized currency system.
Source:Sehnzhen Daily
