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The IMF Says China'S Monetary Policy Should Be Moderate.

2011/9/27 13:45:00 23

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The International Monetary Fund (IMF) held a seminar in Beijing yesterday. Its officials said that China is steadily achieving a soft landing. Unless there is a further food shock, inflation should be reduced to 4.5% at the end of the year.

China's monetary and fiscal situation should continue to return to a more neutral trend.

currency

Policies should be moderate.

No additional support for the economy is needed.

IMF said that China's monetary stimulus and public spending measures are moderate, and it has also slowed down economic growth.

Unless there is a further food shock, inflation should drop to 4.5% at the end of the year.

IMF representative Sima Zhe (MurtazaSyed) pointed out at the seminar that China's

Macroscopic

The adjustment and control policy needs to be changed rapidly under the situation of external economic slowdown.

He pointed out that in view of the continuing concern about credit quality and bank balance sheets, any monetary policy China should adopt should be moderate.

"At this stage, there is no need to provide additional support for the economy, and we should continue to introduce fiscal and monetary stimulus measures."

Sima Zhe said the biggest risks facing the 2.86,0.01,0.35% industry include the real estate bubble, excessive loans in the previous two years, and shadow banking.

He stressed the risk of the bursting of the real estate bubble. "Through the stress test done by IMF, if housing prices drop by 30%, not only small developers and mortgages will be faced with problems, but the relevant industries will also be in trouble," he said.

IMF thinks China is right.

European debt

Right choice

SeanCraig, a IMF representative in Hongkong and a writer of the IMF global financial stability report, said that whether the Chinese authorities are investing in European debt is determined by their risk portfolios. It is the right choice to wait for EU Member States to take effective action, because there are also countries in France that have good fundamentals but need more measures.

"The EU needs to reduce the sovereign debt crisis and prevent its spread, which requires Member States to provide reliable plans to reduce the medium-term deficit, structural reforms in the post growth period, accelerate reforms in the July 21st summit and strengthen the framework for future Euro zone crisis management."

Craig points out.