Zhou Xiaochuan: Stimulus policies gain initial result

The head of China's Central Bank says economic stimulus policies launched last year are already showing some early results. But Zhou Xiaochuan stressed the need to stay vigilant and be quick to respond to changes.

TheheadofChina'sCentralBanksayseconomicstimuluspolicies
launchedlastyeararealreadyshowingsomeearlyresults.

On Tuesday Zhou Xiaochuan said the current global financial crisis is quite severe. Its development was beyond the expectations of many. He said China must resort to a combination of policies to revitalize the domestic economy and at the same time, work to tackle the international crisis. He said China's efforts have begun to pay off, but the country must maintain diligence and be wary of changes.

Zhou Xiaochuan, governor of People's Bank of China, says, "judging from December's economic figures, our stimulus policies have reaped an initial outcome.

But it's too early to make the final judgment. We will continue to follow up on the development of the economic situation as possible new changes, including some dramatic ones occur."

Zhou Xiaochuan said China will continue to pursue a relatively stable yuan and avoid any drastic fluctuations in its value. But he noted possible changes in policies because of the economic situation.

Zhou Xiaochuan says, "at the present, one focus in our implementation of exchange rate policies is the international financial crisis. The crisis has led to a great deal of negative impact and uncertainties. Under such circumstances, our consideration of policies may differ from that in normal times. But generally speaking, the value of China's currency is mainly a result of supply and demand relations in foreign exchange markets."

China's currency, the yuan has appreciated by about 20 percent against the US dollar since 2005. That year the country abandoned a fixed currency peg with the dollar for a managed float. As international trade shrinks because of the global financial crisis, experts say the yuan's value may again emerge as a thorny issue.

Click for more news in Biz China>>