神马文学网China′s economic work conference in focus CCT...
来源：百度文库 编辑：神马文学网 时间：2024/04/27 00:30:28
Play VideoChina's economic work conference is underway in Beijing. It's held once a year to map out the next year's economic policies.
A major shift in China's monetary policy has become the focus. Guan Xin reports it will aim to contain inflation and liquidity while maintaining economic growth.
With a lot of talk about higher prices of late, what exactly is driving them up? The answer is liquidity also known as excessive money in the economic system.
In 2008 China adopted an ultra loose monetary policy to avert a downturn during the global financial meltdown. Money supply expanded nearly 30 percent in 2009. The policy helped to sustain China's economic growth but it also pumped too much money into the economy.
"Over the last two years, homes prices have surged beyond the reach of ordinary Chinese. Consumer prices are at a 2-year high. Liquidity is sloshing around and reigning it in has become the priority for the country's monetary policy."
The central bank seems to be moving in the right direction Two reserve requirement ratio raises and one interest rate hike in less than two months. Central bank's vice governor Ma Delun says it's all part of their efforts to curb rising prices and rapid money supply growth.
Ma Delun, Vice Governor, People's Bank of China, said, "We are targeting overly fast growth in the money supply, and also the hike in consumer prices. Besides the hike in interest rates and the bank reserve ratio, we also conduct frequent open market operations to manage liquidity. We hope these moves can better guide market expectations."
The market is expecting more interest rate hikes in the next 12 months.
But with economies in the West sputtering and China increasingly serving as the engine of global growth, any moves to slow the economy could reverberate around the world.
During the economic conference, China's leaders will lay the course for policy in 2011. The key challenge will be appropriate macro controls that can reign in liquidity without hobbling the nation's growth.