CHINA will continue with its prudent monetary policy in 2012 and sustain a reasonable increase in total social financing to power "stable and healthy" economic growth, Zhou Xiaochuan, governor of the People's Bank of China, said in remarks published yesterday.
The comments came a week after top government authorities decided after an economic conference that China will maintain a proactive fiscal policy and a prudent monetary policy in 2012, seeking faster economic restructuring based on stable growth and stable inflation.
In yesterday's remarks, Zhou highlighted the need to boost the economy instead of stable consumer prices, which used to be the priority when talking about the goal of China's macro-economic measures.
From July to November, China's inflation slowed down from a 32-month high of 6.5 percent to 4.2 percent. The country's gross domestic product grew 9.1 percent from a year ago in the third quarter, the slowest since 2009.
"(The central bank) will continue to implement a prudent monetary policy in 2012 while making it more targeted, flexible and foresighted to support stable and healthy economic growth," Zhou said. "(The central bank) must learn lessons from the global financial crisis to better handle the intensity, pace and focus of financial macro-control."
He said the PBOC will increase support for the "focal sectors" and weak links of the economy, and sustain a reasonable growth of total social financing.
The term "total social financing" was introduced by the central bank to measure all sources of funding in the Chinese economy, including initial public offerings, bank credit and loans from alternative lending markets.
The PBOC said the data was compiled based on information collated from the regulators of the banking and securities industries, the country's top planning body and the inter-bank market.
Latest data showed that total financing totaled 9.8 trillion yuan (US$1.5 trillion) in the first nine months of this year, a decline of 1.26 trillion yuan from the same period of last year. Yuan-denominated bank loans took up 58 percent of the total social financing, up 1 percentage point from a year ago.
Zhou also called for further improvement in the formation mechanism of the yuan's exchange rate and enhancing the management of foreign exchange reserves.
Source:chinesestock