Chinese Central Bank Adviser: Govt. Should Keep Fiscal Stimulus To Gain Full Recovery In 2011
10/23/2009 4:16 AM ET
(RTTNews) -
The Chinese government should keep fiscal stimulus spending until next year to reach a full recovery in 2011, Chinese central bank adviser Fan Gang said Friday.
He said housing market investments have started to recover and some manufacturers reported that they have returned to their normal productivity levels. Fan urged the Chinese government to continue current stimulus measures to boost private investments. The government should also support those companies which are yet to reach the road to recovery, he said without identifying which industries are weakest.
"The economy needs another year of stimulus spending to reach an 8% growth rate in the upcoming year and build a solid base for full recovery by 2011," Fan said in Toronto.
He noted that tightening the monetary policy now may lower economic growth as private investments continue to remain sluggish. Also, exports, the growth engine, has been falling since November 2008, though the pace of decline slightly eased in September 2009, reflecting CNY 4 trillion or USD 586 billion government spending.
In the third quarter, the Chinese economy grew 8.9% in the third quarter, faster than the 7.9% increase in the previous quarter and the 6.1% growth in the first quarter. In the first nine months of the year, the GDP was up 7.7% from the corresponding period of the previous year.
by RTT Staff Writer
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