Central bank governor says economic prospect 'complicated'

Source: Xinhua  |   2008-10-26  |     ONLINE EDITION

CHINA'S economy was on sound track but prospects were complicated by the world economic slowdown, Zhou Xiaochuan, governor of China's central bank, told top legislators today.

The country's economy was developing as expected, but the world economic slowdown added uncertainties to its prospect, he said in a report to the fifth session of the Standing Committee of the 11th National People's Congress.

"Our economy is highly reliant on overseas demand. Sluggish exports resulted from the global economic slowdown would have a negative impact on the economy," he said.

He said the country needed to be cautious on adjusting policies because consumer prices would possibly fluctuate frequently in the future.

The central bank would strengthen the supervision system and make emergency programs to deal with possible negative impact on the country's banking system. It would also work to keep a sufficient credit supply on the domestic market.

He also said the central bank would keep a close look over the real estate sector and improve financial services in this market.

The central bank would let the market "play a bigger role" in deciding interest rates and keep the exchange rates stable. Meanwhile, it would step up supervision over cross-border capital flows to prevent damages caused by short-term massive flows of speculative capital, he added.

The fifth session of the Standing Committee of the 11th National People's Congress opened its second plenary meeting this morning.