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PBoC Adviser: China Must Continue Stable Macroeconomic Policies In H2

[RTT]The Chinese government should continue its stable macroeconomic policies in the latter part of the year, People's Bank of China adviser Li Daokui reportedly said Friday.

Citing comments published in the 21st Century Business Herald, media reports quoted Li as saying that the slowdown in economic growth in the second quarter was within government expectations. Hence, there is no need to change economic policies.

Yesterday, official figures showed that the Chinese gross domestic product, or GDP, rose 10.3% in the second quarter compared to the same period a year ago. Growth was down from the first quarter's 11.9%.

Li noted that the slowdown in growth was not due to the tight monetary policy. He insisted that monetary policy in the second half of the year should remain stable. The central banker expects the Chinese economy to expand about 10.2% this year. During the next ten years, the economic growth should exceed 9% in each year.

Last week, the Chinese central bank had said it will continue to maintain a moderately loose monetary policy, although the economy is heading in the right direction. It had also said the central bank faces a difficult task in containing inflation expectations.

The official said prices pressure is expected to mount in the second half of 2010 due to increasing agricultural prices and labor costs. The latest report from China's National Bureau of Statistics showed that consumer price inflation cooled in June, to 2.9% from 3.1% in May.