BEIJING, Oct 27 — China will stick to its pro-growth policies for the remainder of 2009, but implementation is likely to change, a senior banker said today.
“The focus of our proactive fiscal policy will shift from the spending side to the revenue side, and the key emphasis of the ‘appropriately relaxed’ monetary policy will be on ‘appropriately’ rather than ‘relaxed’,” said Tang Shuangning, chairman of China Everbright Bank, a medium-sized lender.
The cabinet signalled a shift last week in a statement that declared the economy was now on solid ground and that China had to pay attention to inflation expectations as well as growth.
But Tang said the government was determined to keep the overall emphasis on boosting jobs and confidence.
“In the last three months of this year, maintaining growth will remain the key priority,” he said in a speech to a financial forum organised by Chinese portal Sina.com.
Tang, a former senior official with the China Banking Regulatory Commission, said China needed to avoid a new surge in non-performing loans.
“We have a lot of lessons to learn from history,” he said without elaborating.
Li Yining, a Peking University professor who advises the government, said the loose monetary stance would stay in place at least until the annual meeting of China’s rubber-stamp legislature in March.
“The appropriately relaxed monetary policy stance must not change,” Li told the forum. “At least not until the National People’s Congress next year.”
An abrupt shift in policy now would risk undermining what has been achieved because of the stimulus measures, Li warned.
Li said his fieldwork in Liaoning and Guangdong provinces showed that small companies were still finding it hard to borrow from banks despite record headline loan growth.
The government is pushing banks to lend to small and medium-sized enterprises, but Li said the widely accepted official definition of an SME — any company with fewer than 3,000 employees — was too broad.
“In reality, most SME loans have flowed to relatively bigger players, with few bank loans for real small companies ,” Li said. — Reuters
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