China
said Wednesday it would "fine-tune" its monetary policy amid
"global systemic risks", raising hopes of a relaxation of tight
credit as growth in the world's second largest economy slows.
The nation's central bank also warned the
eurozone crisis could "lead to global systemic risks if it spreads more to
core countries," just as the Asian powerhouse suffers from a fall in
exports due to lower demand abroad.
"The People's Bank of China will... at an
appropriate time and in moderate degree pre-emptively adjust and fine-tune (the
monetary policy)," it said in a statement, adding it would do so according
to changes in the global economy.
China's economic growth eased to 9.1 percent
in the third quarter from 9.5 percent in the second quarter due to government
measures to tame inflation and economic turbulence in Europe and the United
States.
The central bank statement comes after the
International Monetary Fund on Tuesday warned that China's financial system is
at risk from bad loans, booming private lending and sharp falls in property
prices.
The Washington-based lender blamed
"heavy" government involvement in the country's banks and watchdogs
for reducing market discipline and corporate governance.
Beijing, anxious about surging inflation, has
been pulling on a variety of levers to curb consumer and property prices in the
past year, including restricting the amount of money banks can lend and hiking
interest rates.
The measures appear to be having an effect --
inflation slowed sharply in October from the previous month, and property sales
have also declined in some cities.
The downturn in China's property market, a
mainstay of the economy, could have a knock-on effect on global trade in
commodities, analysts warn.
Last month, 177 property agencies shut down in
Beijing alone after sales nose-dived, according to a report published recently
by Home Link China -- one of the country's biggest estate agencies.
There are now more than 120,000 unsold
properties on the market in the capital, the highest number in 29 months, the
state-run Beijing News daily said, citing official figures released last week.
Analysts are also concerned about the nation's
politically sensitive trade surplus -- a constant bugbear for major trade
partners such as the United States and Europe -- which widened to $17 billion
in October from $14.51 billion in September.
Beijing has indicated it may tinker with
policy as the deepening eurozone crisis and US economic woes squeeze demand for
Chinese exports and small businesses struggle to get financing, putting at risk
millions of jobs.
In a list of 29 key recommendations on how
Beijing can improve its financial system, the IMF urged policymakers to allow
state-owned banks to make lending decisions based on commercial risk rather
than government policy.
It also called on Beijing to allow interest
rates to be determined by "supply and demand", and to use this tool
rather than administrative measures to control credit.
The IMF also called on authorities to loosen
currency controls and give autonomy to the central bank and other supervisory
bodies to "help bring the system more in line with international
practices".
Premier Wen Jiabao repeated last month that
controlling prices was still a key task, but also said the government could
alter economic policy when the time was right, in comments similar to the
bank's Wednesday announcement.
Analysts have said policymakers are likely to
reduce the reserve requirement ratio -- the portion of deposits banks must set
aside -- in the coming months to spur lending, but they have ruled out a change
in interest rates.
AFP
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