China central bank vows lending control to tame inflation
BEIJING: China's central bank took aim at inflation once again on Monday by saying it will control lending and money growth in the world's secondbiggest economy to head off price pressures and asset bubbles. In a statement on the central bank's website (www.pbc.gov.cn), Hu Xiaolian, a deputy governor, said China had been normalizing policy and will explore new ways to manage excess cash, which is seen as a major driver behind 28-month high inflation.
Her remarks reinforced statements from China's top leaders that the task of taming inflation will be a priority for Beijing next year.
"An implementation of prudent monetary policy is helpful in strengthening the management of inflationary expectations and in fending off asset bubbles," Hu said.
On Saturday-Christmas Day-the central bank surprised investors with a 25-basis-point rate rise in benchmark deposit and lending rates, its second increase in just over two months. Hu reiterated the central bank's determination to drain excess cash from the financial system by using all tools at its disposal: interest rates, reserve requirement ratios, open market operations and more.
"We will explore new tools ... to keep a good control on the gate of liquidity," she said, but did not indicate what these might be. A steady stream of anti-inflation talk from the Chinese central bank has led many investors to bet on more rate increases in 2011.
A Reuters poll showed investors see the benchmark one-year deposit rate rising to 3.25 percent by the end of next year, from 2.75 percent now.
In a separate statement, the monetary policy committee within the central bank noted China's economic resilience, but with a touch of caution. -Ap
HAI PHONG: A ship under repair at Vinashin's Nam Trieu shipbuilding factory in Hai Phong city. Vinashin is being restructured and official media last week quoted the company's chairman, Nguyen Ngoc Su, as saying the process will leave 13,000 workers redundant. -Afp