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Slowed economic growth spreads market fears, urging china to turnto new economic stimulus measures by wwy yrj
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Slowed economic growth spreads market fears, urging china to turnto new economic stimulus measures by WWY YRJ
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| Article Posted: 06/22/2012 |
| Article Views: 143 |
| Articles Written: 1412 - MORE ARTICLES FROM THIS AUTHOR |
| Word Count: 483 |
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Slowed economic growth spreads market fears, urging china to turnto new economic stimulus measures |
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Business,Business News,Business Opportunities
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The People's Bank of China (PBC), the country's central bank, seemsto be loosening liquidity to stimulate economic growth. According to the PBC, in March, newly increased renminbi loansreached 1.01 trillion yuan ($160.32 billion), much higher than themarket expected and hitting a record high in the past 15 months. After the global economic crisis in 2008, China launched a4-trillion yuan ($634.92 billion) stimulus package to stabilizeeconomic growth. In the meantime, it adopted an eased monetarypolicy with monthly credit surpassing 1 trillion yuan ($158.73billion). However, to cope with inflation, China has graduallyreduced stimulus efforts, causing the credit scale to dropmarkedly.
In the past year, newly granted loans each month were allmuch lower than 1 trillion yuan ($158 billion). The massive growth of monthly credit this time appeared as theChinese economy has been undergoing a decrease in growth. In thefirst quarter of this year, China recorded a GDP growth of 8.1percent, lower than the market expectation. This is the fifthconsecutive slowdown of quarterly GDP growth after the firstquarter of 2011 and the lowest in three years. Li Wei, an economic analyst of Standard Chartered Bank, said themassive credit scale growth in March may indicate the government'sintention to ease the monetary policy and ensure economic growth.
Wang Tao, analyst of UBS Securities Co. Ltd., said the currentfigures reflect the government's regulation intentions that bothmonetary and fiscal policies will be eased. According to Wang, with the government's practice of allowing banksto grant loans for the construction of affordable houses and otherkey projects under construction and relaxing control of loansgranted to first house purchasers and developers of commoncommercial houses, the newly added loans in March increasedmarkedly. This also indicates that capital will give more supportto the real economy and it is more likely that economic growth willreach the bottom in the second quarter. Favoring growth After China publicized economic and financial figures for the firstquarter, the central bank said it would increase liquidity suppliesby various means such as lowering deposit reserve rate,appropriately strengthening reverse repurchase rates and releasingliquidity by expired central bank bills.
Zhu Jianfang, chief economist of CITIC Securities Co. Ltd., saidthe central bank's recent actions indicate that when maintainingthe keynote of being moderate, the government tends to ease themonetary policy to some sectors, with the aim of "transfusingblood" to the real economy in transition. "The focus of the policy is transferring from controlling inflationto ensuring steady economic growth," Zhu said. Zhu said that as the European debt crisis rages on, capital flowingto China will slow and the amount of base currency from fundsoutstanding for foreign exchange will then be reduced. It is stillpossible that the deposit reserve rate will be further lowered. I am a professional writer from Gifts & Crafts, which contains a great deal of information about leather dice cup , personalized unity candle, welcome to visit!
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