China reaffirms yuan, monetary and fiscal policy
BEIJING, March 5 (Reuters) - China will stick to an appropriately easy monetary stance and a proactive fiscal policy as it seeks to counter the lingering impact of the international credit crunch, Premier Wen Jiabao said on Friday.
Wen's characterisation of his government's economic policy was contained in his annual report to the opening session of the National People's Congress, China's largely ceremonial parliament.
Beijing pumped up credit, slashed interest rates and launched a 4 trillion yuan ($585 billion) infrastructure programme in late 2008 to cushion its economy from the global downturn.
Investors had been waiting on Wen's choice of words to judge how rapidly Beijing might withdraw this stimulus.
China, which is poised to overtake Japan this year as the world's second-largest economy, has already raised banks' required reserves twice since the start of 2010. But, unlike Australia or Malaysia, it has so far refrained from increasing interest rates.
Wen said a turnaround in the economy should not be misinterpreted as a fundamental improvement because China still lacked an internal driver of growth.
Wen also signalled continued caution towards the yuan , reiterating standard language that Beijing would seek to keep the currency basically steady at a reasonable and balanced level.
To the dismay of Washington and Brussels, China has frozen the yuan's exchange rate at around 6.83 per dollar since mid-2008 to preserve the international competitiveness of its exporters. (Reporting by Simon Rabinovitch; Editing by Alan Wheatley)
BEIJING, March 5 (Reuters) - China will stick to an appropriately easy monetary stance and a proactive fiscal policy as it seeks to counter the lingering impact of the international credit crunch, Premier Wen Jiabao said on Friday.
Wen's characterisation of his government's economic policy was contained in his annual report to the opening session of the National People's Congress, China's largely ceremonial parliament.
Beijing pumped up credit, slashed interest rates and launched a 4 trillion yuan ($585 billion) infrastructure programme in late 2008 to cushion its economy from the global downturn.
Investors had been waiting on Wen's choice of words to judge how rapidly Beijing might withdraw this stimulus.
China, which is poised to overtake Japan this year as the world's second-largest economy, has already raised banks' required reserves twice since the start of 2010. But, unlike Australia or Malaysia, it has so far refrained from increasing interest rates.
Wen said a turnaround in the economy should not be misinterpreted as a fundamental improvement because China still lacked an internal driver of growth.
Wen also signalled continued caution towards the yuan , reiterating standard language that Beijing would seek to keep the currency basically steady at a reasonable and balanced level.
To the dismay of Washington and Brussels, China has frozen the yuan's exchange rate at around 6.83 per dollar since mid-2008 to preserve the international competitiveness of its exporters. (Reporting by Simon Rabinovitch; Editing by Alan Wheatley)