Source: CCTV.com

05-11-2008 12:59

The global economic slowdown is forcing China's monetary authorities to take a second look at policy goals. The head of the central bank say inflation remains the top concern.

Zhou Xiaochuan, governor of the People's Bank of China, addresses the  Lujiazui Forum 2008 in Shanghai, east China, May 10, 2008. Heads of  the People's Bank of China, the country's central bank, the Securities  Regulatory Commission, the Banking Regulatory Commission and the  Insurance Regulatory Commission all attended the two-day financial forum,  opened on May 9. Lujiazui is the name of Shanghai's financial district. (Xinhua Photo)

Zhou Xiaochuan, the governor of People's Bank of China, the country's central bank said China's monetary policy must target inflation over growth and employment. He said that in a forum in Lujiazui, Shanghai's Financial center on Saturday. This is in contrast with the policies of the US and other countries which are currently more focused on fending off a possible recession.

Zhou Xiaochuan said, "We are more concerned about the inflation than other issues when making our monetary policies. We have noticed that since last year, in many emerging markets and some developed countries, inflation has been building up indicated by the rising oil, food, labor and material prices."

Experts say besides rising costs of materials, red-hot domestic investment has also contributed to inflation. They say the appreciation of the country's currency may be a more effective measure to offset inflation than further interest rate hikes.

Hu Zuliu, president of Goldman Sachs Asia-Pacific, said, "Now trade accounts for 70 percent of China's annual GDP, so the global price surges of oil, rice and iron ore would worsen our domestic inflation. Letting the RMB appreciate further will keep imported inflation in check."

China's April consumer price index figure will be released on Monday and is anticipated to be higher than 8.3 percent in March -- a new record high.

Editor:Zhang Ning