China can usher in soft landing -former adviser
China is well placed to steer its economy to a soft landing and a slowdown would be a normal part of the country’s development cycle, prominent economist Yu Yongding said in comments published on Wednesday.
The government should focus more on restraining inflation than on helping exporters and should allow the yuan to appreciate further with that goal in mind, Yu, a former member of the central bank’s monetary policy committee, wrote in the China Daily.
Yu’s optimism on growth and hawkish stance on inflation stand out in China at a time of mounting fears over a sharp drop in the economy’s pace of expansion and a decrease in price pressures.
Annual growth in the third quarter was 9.0 percent, down from 11.9 percent in all of 2007. Consumer price inflation, meanwhile, slowed to 4.6 percent in the year to September from a 12-year high of 8.7 percent in February.
“We should have full confidence to curb any possible serious slide in our economy and bring it to a soft landing,” Yu wrote.
The government is armed with strong finances and the world’s largest stock of foreign currency, and could easily stimulate demand through a burst in public spending, he said.
But Xia Bin, a senior economist from the Development Research Centre, a think-tank under the State Council, said weaker growth of power production, cargo loading at ports, fiscal revenues and bank lending all provided clear signs of a steep economic deceleration.
“If policy changes are slow and not big enough, the government’s worry about an overly sharp slowdown will become a reality in the first half of next year,” he told a conference in Beijing.
He urged the central bank to slash interest rates enough in one go to restore consumers’ and companies’ confidence, instead of by the usual increments of 27 basis points per rate change.
Tags: central-bank, exports, inflation, investmentPages: 1 2
