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World Bank raises China's growth forecast to 9.3%
(chinadaily.com.cn/agencies)
Updated: 2005-11-03 11:44
While
that rock-steady performance shows little evidence of a slowdown, the
authorities have been aiming not so much at reining in economic momentum as
rebalancing it away from its reliance on investment, whose roaring growth two
years ago raised fears of a bust.
Government data has since shown
slowing investment growth in fixed assets, such as factories and office
buildings.
Growth in M2 money supply, a measure of how much cash is
available in the banking system, has accelerated in recent months.
Some
have seen that as a sign that the central bank has taken its foot off the brake,
but Tang said foreign money coming into the country was the cause.
"Rapid M2 growth in recent months was caused by rapid inflow of foreign
exchange," he said. The bank's monetary policy was stable.
"The purpose
of the stable monetary policy is to keep economic growth on a stable footing,"
Tang said. "Based on end-September figures, foreign exchange reserves are still
growing at a fast pace and I dare not say they will slow down."
The
reserves have risen because China has been exporting more than it imports,
because foreigners have sent money to the country to invest, and because
speculators anticipating appreciation have bought yuan.
"In the short
term, there will be upward pressure on the renminbi (yuan) but in the long term
it will depend on how the economy performs and on other factors, such as the
global economy and productivity."
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