Wednesday 24 March 2010


CHINA NEEDS ‘VERY CERTAIN’ RECOVERY FOR STIMULUS END, ZHOU SAYS

Bloomberg, March 24, 2010

China’s government needs evidence of a “very certain” recovery before it can roll back stimulus measures adopted during the crisis, central bank Governor Zhou Xiaochuan said.

“If you can be sure about the recovery, and then some of the extraordinary stimulus policies can gradually fade out,” Zhou said in an interview in San Jose, Costa Rica. “On the other hand, you should know that it’s not a W-shaped recovery,” with a renewed slowdown following the current rebound, he said.

China has yet to raise interest rates or allow its exchange rate to appreciate, keeping in place some of the extraordinary measures even as inflation and asset prices accelerate. Zhou’s concern about risks of a w-shaped recovery echo a warning yesterday by Harvard University Professor Martin Feldstein that there is a “significant risk” of a U.S. return to recession.

Policy makers need to see “quite definite evidence or statistical data to show it’s a good recovery,” said Zhou, who spoke late on March 23 after arriving in Costa Rica from Cancun, Mexico, where he attended an annual meeting of the Inter- American Development Bank.

“Under normal circumstances, China’s current growth and strong economic indicators may have triggered more aggressive tightening, but the special circumstance means the tightening may not come as fast,” said Peng Wensheng, head of China research with Barclays Capital in Hong Kong. “In general Chinese officials will be very cautious and they’d rather withdraw stimulus slower rather than quicker.”

(...) [artículo aquí]

No comments: