Economist calls for improved research

CHINA'S policy makers should enhance microeconomic research to guarantee proper stimulus measures in different regions and industries, a renowned economist said yesterday.

Li Yining, professor of economics at Peking University, said there are limits in carrying out a uniform economic policy in a vast country like China.

"Macroeconomic policy is the foundation and it should be adapted to different microeconomic conditions," Li said at a forum organized by Sina.com in Beijing.

For example, some economists have suggested a shift in the current easy monetary policy to curb inflation expectations. Other economists said changing the policy too quickly would put the economic recovery at risk.

Li said a decision shouldn't be made until after an analysis of the microeconomic environment.

"First, we should study the proportion of the stimulus package in the real economy and in capital markets. Second, we should know the amount of funds that have been channeled into companies with real growth potential, instead of big firms that are not short of money. Third, we need to know how much capital is used in central and western regions of China, where financial support is urgently needed for development," Li said.

Li said banks are still reluctant to lend to small businesses due to the higher risk involved.

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