Central Banker Says China Will Tighten Controls in 2008 to Curb Rapid Credit Growth.
China will tighten monetary controls next year to curb rapid credit growth, said a deputy central bank governor quoted Monday by a government newspaper.
The communist government is trying to cool an investment boom that it worries could ignite financial problems and rein in an inflation surge that saw politically sensitive consumer prices rise in October at their fastest monthly rate in a decade.
"We need to strengthen macro controls, limit the total volume of money and credit and adjust the credit structure," the China Securities Journal quoted Liu Shiyu as saying at a conference on China's 2008 economic outlook.
The remarks sparked jitters among investors and contributed to declines in the Shanghai and Hong Kong stock markets. State media reported earlier that Communist Party leaders decided this month to shift monetary policy "from prudent to tight" in 2008 to prevent overheating and a surge in inflation.
Chinese leaders want rapid economic growth to reduce poverty but worry that runaway spending on factories, real estate and other assets could cause a debt crisis if ill-conceived projects fail. They are trying to channel more money into renewable energy and other cleaner industries and into building housing for the poor.
China's economy is expected to grow by 11.5 percent this year and by more than 10 percent in 2008. A sharp rise in food costs has fed a spike in inflation that saw consumer prices rise by 6.9 percent in November over the same month last year, the highest rate since 1996.
Regulators will rely on "window guidance," or orders to lenders, and direct institutions to tighten credit management and control credit growth, Liu said. The government also will increase channels for companies and individuals to get access to foreign investment and money from other non-bank sources, according to the report.
China will tighten monetary controls next year to curb rapid credit growth, said a deputy central bank governor quoted Monday by a government newspaper.
The communist government is trying to cool an investment boom that it worries could ignite financial problems and rein in an inflation surge that saw politically sensitive consumer prices rise in October at their fastest monthly rate in a decade.
"We need to strengthen macro controls, limit the total volume of money and credit and adjust the credit structure," the China Securities Journal quoted Liu Shiyu as saying at a conference on China's 2008 economic outlook.
The remarks sparked jitters among investors and contributed to declines in the Shanghai and Hong Kong stock markets. State media reported earlier that Communist Party leaders decided this month to shift monetary policy "from prudent to tight" in 2008 to prevent overheating and a surge in inflation.
Chinese leaders want rapid economic growth to reduce poverty but worry that runaway spending on factories, real estate and other assets could cause a debt crisis if ill-conceived projects fail. They are trying to channel more money into renewable energy and other cleaner industries and into building housing for the poor.
China's economy is expected to grow by 11.5 percent this year and by more than 10 percent in 2008. A sharp rise in food costs has fed a spike in inflation that saw consumer prices rise by 6.9 percent in November over the same month last year, the highest rate since 1996.
Regulators will rely on "window guidance," or orders to lenders, and direct institutions to tighten credit management and control credit growth, Liu said. The government also will increase channels for companies and individuals to get access to foreign investment and money from other non-bank sources, according to the report.
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