Against the backdrop of slower growth in Europe and the rest of the world, and with the local economy clearly responding to the significant tightening in monetary policy,
Chinese policy-makers are starting to adopt a slightly more accommodating tune. Overnight, Chinese Premier Wen Jiabao suggested that economic policy would be ‘fine-tuned’, while the industry ministry is studying fresh initiatives to aid small businesses. The director-general of the industry ministry also observed that the pace of output growth was likely to slow both this quarter and next year.
Chinese policy-makers are starting to adopt a slightly more accommodating tune. Overnight, Chinese Premier Wen Jiabao suggested that economic policy would be ‘fine-tuned’, while the industry ministry is studying fresh initiatives to aid small businesses. The director-general of the industry ministry also observed that the pace of output growth was likely to slow both this quarter and next year.
With inflation still above 6%, it is too soon to expect any relief on interest rates, although what is probably being considered is some reduction in bank reserve requirements which have been lifted appreciably over the past year. Good news then for risk-takers – the major advanced economies continue to implement ultra-loose monetary policy, and now it appears that the world’s second largest economy is considering the merits of making financial conditions a little easier.
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