China to continue loose monetary policy, stressing inflation control: PBOC governor

China's economic expansion in 2009 has far exceeded market expectations. The central bank governor says the growth will not be the catalyst for a new round of monetary policy adjustments and policies will be flexible for this year.

One hour after the National Bureau of Statistics published a raft of macro-economic data for 2009, Zhou Xiaochuan, governor of the People's of Bank of China told a press conference in Beijing that a relatively loose monetary policy will continue this year.

Zhou said, "In 2010, the Central Bank will continue to adopt a  relatively loose monetary policy to maintain stability and  consistency. The stress will focus on flexibility and efficiency  to support economic growth and control inflationary expectations.  Meanwhile credit policy will make sure it goes to key sectors of  economy."

Zhou said, "In 2010, the Central Bank will continue to adopt a relatively loose monetary policy to maintain stability and consistency. The stress will focus on flexibility and efficiency to support economic growth and control inflationary expectations. Meanwhile credit policy will make sure it goes to key sectors of economy."

Last week, China raised its deposit reserve ratio by half of a percentage point for the first time since June 2008, surprising analysts and the equity market. It also raised the yield of central bank bills three times in the first 20 days of 2010. The moves triggered widespread concern that the government is serious in curbing liquidity. They also demonstrated how flexible the monetary policy can be.

Interview:

For more analysis on the newly released economic figures, our reporter Yuan Xiaoyuan spoke to professor Huo Deming from Peking University. Watch video >>