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China to Meet Growth Target without Big Stimulus: Bank Chief
   2016-03-12 20:20:54    CRIENGLISH.com      Web Editor: Guo Yan

Zhou Xiaochuan, governor of the People's Bank of China, answers questions at a press conference on the financial reform and development on the sidelines of the fourth session of the 12th National People's Congress in Beijing, capital of China, March 12, 2016. [Photo: Xinhua]

China's central bank governor says the country can hit this year's official growth target without large-scale stimulus and has no need to weaken its currency to boost exports.

The governor commented at a news conference for the national legislature to highlight the county's determination on financial reforms.

 

Central bank governor Zhou Xiaochuan says the growth targets China has set for the next five years can be realized without major economic stimulus.

"I personally think China will stick to the prudent monetary policy on condition that there is no global and domestic financial turmoil. There is no need to adopt excessive monetary stimulus to achieve growth. The growth targets are attainable through improving domestic demand, consumption and innovation."

China's growth target for 2016 is in the range of 6.5 percent and 7 percent, while the forecast for years leading to 2020 is above 6.5 percent.

Zhou says China will seek growth by relying more on domestic demand, as the old growth driver of exports loses steam and is not able to contribute to the economic growth the way it used to.

The depreciation of the Chinese currency has stoked concerns that China may count on the falling currency to prop up its foreign trade.

The governor says that China has no intention of manipulating its currency rate to stimulate exports.

"China's products are still competitive in the global market, especially manufacturing products. Though there are problems of cost increases and the loss of competitive edge, generally speaking, their competitiveness is still good. We don't necessarily adopt stimulus plan to boost exports. There should be a balance between exports and imports. Our imports have suffered more losses. So when we map out policies we have to consider their influence on imports as well."

The bank chief also says that China's housing market is facing pressure because of too much stock available on the market.

To boost the housing market, China's central bank cut down-payments last month and lowered transaction taxes for some home buyers.

At the meantime, the central bank is also warning that the practice of granting loans by real-estate developers and agents to home-buyers to pay down payment increases risks to the property market and financial system.

Central bank governor Zhou Xiaochuan says some of these online lending platforms are not qualified at all.

"The down-payment shouldn't be on loans. People pay the down-payment by borrowing money from somewhere else, then they have to pay the mortgage to the bank every month and the down-payment loans at the same time. The banks suffer huge risks without fully judgments for their clients."

Also the central bank has vowed to work with other government agencies to firm action against home loans raised in the grey market to ward off risk.

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