Top banker: Domestic growth key to market stability

Updated: 2008-11-09
(China Daily)

SAO PAULO - China's central bank will seek to help stabilize global financial markets by maintaining Chinese economic growth and spurring domestic demand, the bank's governor said on Saturday.

China's central bank governor Zhou Xiaochuan. [file photo]

Speaking to reporters at a G20 finance officials meeting in Brazil's business capital, Zhou Xiaochuan also said the People's Bank of China is monitoring the market situation to decide its next interest rate move.

"We are closely watching the developments of the financial crisis and the situation of global activity... On the other hand, we also pay attention to declining inflation. We put them together to decide what we should do," Zhou said when asked if China would keep following the global trend of lowering rates.

China has already reduced interest rates three times in the last month and a half.

Zhou added that China's central bank intends to "actively work" with the International Monetary Fund to hash out a plan to stabilize volatile financial markets.

He stressed that maintaining economic growth in China is crucial to helping restore a sense of normalcy to global markets.

"I think, China, as a large country, try to maintain our economic growth and domestic demand. If China could maintain internal demand, I think it will be good for global stabilization," he said.

Zhou said the bank forecasts the Chinese economy to expand between 8 and 9 percent in 2009.

Some economists have predicted that Chinese growth could slow to less than 8 percent next year.