China's economy coming in for 'soft landing': official
China's economy is moving towards a "soft landing" as the government has a "strong ability" to rein in soaring inflation, the head of the country's banking watchdog said on Friday.world Updated: Dec 17, 2010 13:41 IST
China's economy is moving towards a "soft landing" as the government has a "strong ability" to rein in soaring inflation, the head of the country's banking watchdog said on Friday.
Production, consumption and investment remained strong in China even as breakneck economic growth slowed throughout the year, Liu Mingkang, chairman of the China Banking Regulatory Commission, told a financial forum.
"The economy is experiencing a soft landing trend, judging from the current point," Liu said.
The world's second-largest economy posted annualised growth of 9.6 % in the July-September period, slowing from 10.3 % in the second quarter and 11.9 % in the first three months, official data showed.
Inflation surged to 5.1 % in November, the fastest increase in more than two years and well above Beijing's full-year target of three %, as food costs continued to soar.
Liu said inflation in 2011 was "likely to be contained at a reasonable level" and added there had been "wide, positive reactions" in the market after the State Council, or cabinet, took a slew of measures to curb price rises.
"The government has quite a strong ability to curb inflation," he said at the event sponsored by Caijing magazine.
China's central bank announced in October the country's first interest rate hike in nearly three years.
Last Friday, the central bank ordered lenders for the sixth time this year to keep more money in reserve, as authorities struggle to stem the flow of liquidity into the economy, which is fanning inflation.
Zhou Xiaochuan, governor of the People's Bank of China, said at the forum that authorities were aiming to speed up the market reform of the interest rate regime to make the policy more effective in influencing the economy.
In comments published on Friday in the China Daily, Zhou said the country needed to do more to soak up excess liquidity in the economy, but warned the central bank should be cautious in raising interest rates.