China says growth stable but imbalances remain

Beijing, Sep 30: China's central bank said on Saturday the economy continued to expand at a moderately fast pace, but there remained structural imbalances such as the large balance of payments surplus and shortage of raw materials.

China's policy going forward will focus on continuity and stability to expand cooling measures, aggressively stimulate domestic demand and optimise the investment structure, said the central bank in a statement after its quarterly meeting.

Beijing has stepped up its longstanding campaign to cool runaway investment growth and its red-hot economy amid fears of bubbles appearing, especially in the property sector as investment growth remains strong.

The authorities have twice this year raised benchmark lending rates and the amount of cash that banks must hold in reserve to slow investment spending and bank loan growth.

Over the past week, China has also quietly allowed the yuan to appreciate a little faster, setting the stage for a possibly wider trading band, traders and analysts said.

But tighter monetary policy over the past six months has only partially succeeded in restraining breakneck money supply growth, so currency appreciation has become an increasingly attractive tool to moderate the economy.

Reuters