China should fine-tune monetary policy based on economic
growth, price changes - Xinhua
Send a link to a friend
[April 22, 2019] BEIJING
(Reuters) - China should fine-tune monetary policy in a pre-emptive way
based on economic growth and price changes, the official Xinhua News
Agency said on Monday, citing a top-level meeting chaired by President
"Monetary policy needs to be neither too tight, nor too loose and should
be fine-tuned in a timely and pre-emptive way based on economic growth
and changes in price situations," Xinhua quoted the Central Financial
and Economic Affairs Commission as saying.
The report was the fourth from a top-ranking policymaking body in China
in less than two weeks, and comes as financial markets debate how much
more additional support Beijing will provide to the world's
second-largest economy after surprisingly resilient data released last
The economy expanded at a steady 6.4 percent pace in the first quarter,
defying expectations for a further slowdown, with industrial output,
retail sales and investment in March all growing faster than expected
following a raft of growth-boosting measures rolled out in recent
China's growth last year cooled to a near 30-year low of 6.6 percent,
weighed down by weak investment and the escalating trade war with the
The Xinhua report on Monday did not give more details on the reference
to watching price changes.
Producer and consumer price gauges in China have picked up, easing
concerns about deflationary risks, but broader inflation levels are
The policy comments from the financial commission meeting largely echoed
those from meetings of China's Politburo, the State Council and the
central bank in the past two weeks.
A statement on Friday from the Politburo, a top decision-making body of
the Communist Party, said China will maintain policy support for the
economy, which still faces "downward pressure" and difficulties despite
better-than-expected first quarter growth.
[to top of second column]
A man checks phone at Lujiazui financial district in Pudong,
Shanghai, China March 14, 2019. REUTERS/Aly Song
It said authorities will strike a balance between stabilizing economic growth,
promoting reforms, controlling risks and improving people's livelihoods, adding
that China would forward with structural efforts to control debt levels and
prevent speculation in the property market, it said.
Chinese stock markets fell sharply on Monday as investors feared the government
will temper the pace of further policy easing if the economy continues to
improve. China's major stock indexes have surged around 30 percent so far this
year on expectations stimulus will stabilize the economy.
While analysts cautioned it was too early to call a turnaround, some market
watchers bumped up their China growth forecasts after last week's data and
lowered their expectations of further support measures.
Monday's comments from the financial commission also reiterated that China will
step up fiscal policy and strengthen macro counter-cyclical adjustments, a
phrase that usually refers to efforts to reduce pressure on the economy.
In March, the government announced billions of dollars in additional tax cuts
and infrastructure spending to help businesses and protect jobs.
Regulators are likely to keep up efforts to keep credit available to smaller
firms at more affordable rates, though there are concerns that a recent surge in
bank lending could fuel another jump in bad loans and speculation in property
"The key takeaway from the (policy) meetings is that there is limited room for
further marginal monetary easing...However, we donít see a U-turn of its
monetary policy any time soon." analysts at OCBC said in a note.
(Reporting by Stella Qiu and Kevin Yao; Editing by Kim Coghill)
[© 2019 Thomson Reuters. All rights
Copyright 2019 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.