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| China: eco macro-control to be tested in 2010 |
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| issuance time：2010-2-26 visited：70 source：
Xinhua
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China's macroeconomic management would be put to the test both by the domestic and international markets in 2010, said Chairman of National Development and Reform Commission (NDRC) Zhang Ping Friday.
The country's fiscal and monetary policies would be tested given the uncertainties of 2010, Zhang said.
"As to monetary policies, if the bank continues to provide easy loans,inflation may occur. But if the government tightens monetary policies too soon, the economy may relapse into recession." said Li Daokui, director of the Center for China in the World Economy, Tsinghua University.
Last year, Chinese banks lent an unprecedented 9.6 trillion yuan (1.4 trillion U.S. dollars), nearly twice as much as 2008, and nearly half of 2009's gross domestic product (GDP).
This year, for fear of asset bubbles and bad loans, the banking regulators have begun to put the brakes on bank lending. The People's Bank of China (PBOC), China's central bank, raised the reserve ratio by 0.5 of a percentage point earlier this month, hoping to reduce lending.
According to the PBOC, new loans in January totalled 1.39 trillion yuan, down 230 billion yuan year-on-year, and China Banking Regulatory Commission Chairman Liu Mingkang said the Chinese government planned to restrict credit supply to 7.5 trillion yuan (about 1.1 trillion U.S.dollars) in 2010.
Too much public investment caused weak private investment and overcapacity in some industries like steel, said Zhang Xiaoqiang, vice chairman of the NDRC.
"There's uncertainties about economic growth restructuring and fiscal stimulus plans," said Tang Min, vice secretary-general of China Development Research Foundation.
The central government allocated about 924.3 billion yuan for public spending last year, 503.8 billion yuan more than the 2008 budget, said Finance Minister Xie Xuren.
To face the challenges, fiscal policies would focus on consumption stimulus and development of new economic sectors like new energy industries, said Xie at the Central Economic Work Conference held last month.
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