Chinese Premier Wen Jiabao signaled there’s more room for fiscal and monetary policy to support growth, saying the nation has full confidence it will meet its economic goals for the year.
“The government has fiscal and monetary war chests to revive growth but there does not seem to be much appetite to roll out a large-scale stimulus package,” said Wang Qinwei, a London-based economist with Capital Economics who previously worked at the People’s Bank of China.
Officials in China have refrained from easing monetary policy since cutting interest rates in June and July and lowering banks’ reserve requirements three times from November to May.
Inflation that accelerated for the first time in five months in August may limit any monetary easing.
The last stimulus resulted in a “large hangover in the form of worries about bad debt and overinvestment,” said Wang of Capital Economics. “The authorities are now increasingly aware that stimulus only worsens China’s economic imbalances.”
http://www.bloomberg.com/news/2012-09-11/wen-says-china-confident-it-will-maintain-stable-economic-growth.html
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