The world economic crisis is clearly having an impact on China, but the country's fundamental prospects remain bright, deputy central bank governor Yi Gang said yesterday.
Chinese industrial output growth has slowed sharply in recent months and exports fell in November as the reverberations of the global financial meltdown hit the country's manufacturers.
But Yi struck a note of confidence, telling a forum that he expected the economic situation to be "relatively stable" this year.
The government launched a 4 trillion yuan ($585 billion or Dh2.14trn) stimulus package and the People's Bank of China has repeatedly cut interest rates to prop up domestic demand. "China's basic outlook is good," Yi said.
He said businesses were increasing inventories of commodities and raw materials, a process that would continue this quarter and possibly next.
"This may indicate that the Chinese economy will have a change in the second or third quarter," the deputy central bank governor said.
In contrast to other countries that had suffered financial crises, China's banks, overall, were enjoying "their best period", Yi said.
Nor had liquidity in the Chinese banking system dried up. Liquidity had been "a little excessive" before the crisis struck; now it was at an "adequate" level, he said.
Furthermore, the debt levels of households, businesses and the government were modest and did not represent a risk, Yi said.
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