Zhou Xiaochuan on Chinese Economy

By staff reporter Dong Ning

"We are going to continue with a moderately easy monetary policy, but at the same time keep close watch on the inflation issue and changes in other economic indicators," the central bank governor Zhou Xiaochuan told a press conference on March 6. He noted that inflation control will be very complicated this year.

"It's difficult for us to foresee all the possible scenarios and changes in indicators. Therefore, our policy will be adjusted according to changes in economic indicators and feedbacks in the course of implementation."

Mr. Zhou said that there are many things to be worried about for Chinese economy, such as the value of U.S dollar. For the moment the U.S. dollar is still a very important currency, critical to international trade, transnational flow of capital, direct investment as well as the world’s changes of surviving the financial crisis.

As of the exchange rate of the Renminbi, Mr. Zhou said that China will further improve the formation mechanism of the currency’s exchange rate, to keep it basically stable at an adaptive and balanced level. Now the nation is undergoing the transition from a controlled economy to a socialist market economy. The value of yuan therefore will be adjusted according to the progress in establishing an open market economy and the pace of globalization.