- Title: JAPAN: China's central bank deputy governor says stimulus will be "appropriate".
- Date: 14th October 2012
- Summary: TOKYO, JAPAN (OCTOBER 14, 2012) (REUTERS) DEPUTY CHIEF AT BANK OF CHINA YI GANG SEATED ON STAGE FOR LECTURE IMF MEETING LOGO AUDIENCE SEATED YI WALKING UP ONTO PODIUM (SOUNDBITE) (English) DEPUTY CHIEF AT BANK OF CHINA YI GANG SAYING: "The stimulus package I think this time will be appropriate in terms of size; when I say appropriate in terms of size, that is, large enough to stabilize the growth but not too large to cause some further negative impact or negative problem in the future." AUDIENCE LISTENING LECTURE IN PROGRESS JOURNALIST ASKING QUESTION (SOUNDBITE) (English) DEPUTY CHIEF AT BANK OF CHINA YI GANG SAYING: "To tell you the truth, the inflation targeting is probably more appropriate for small, open economy. And, if you look at larger economy in the world, like the United States and Japan, for developing countries like India and China, you see the U.S. and Japan they somehow do not use inflation targeting. And India and China do not use inflation targeting. If you really think about there is a logic in it." JOURNALIST ASKING QUESTION (SOUNDBITE) (English) DEPUTY CHIEF AT BANK OF CHINA YI GANG SAYING: "The internationalization of Renminbi is entirely a market driven phenomenon. I don't promote it." CAMERAMAN FILMING (SOUNDBITE) (English) DEPUTY CHIEF AT BANK OF CHINA YI GANG SAYING: "In the past, China restricted using Renminbi; that's not fair. So, what the central bank did is just remove some barriers for using Renminbi. If our trade partner or investment partner like using Renminbi, why not? So, I would like to only create a level of playground to make it an equal competition between the major convertible currencies and the Renminbi, and to let our trade partner or investment enterprise to choose themselves according to market condition." VARIOUS OF AUDIENCE CLAPPING
- Embargoed: 29th October 2012 12:00
- Keywords:
- Location: Japan
- Country: Japan
- Topics: Economy
- Reuters ID: LVA4WNVUXT7SR2ICE5PEPR0PRQCD
- Story Text: Deputy Chief of China's central bank Yi Gang said in Tokyo on Sunday (October 14) China's fiscal and monetary stimulus package will be "appropriate" to stabilize its growth.
Speaking on the sidelines of the International Monetary Fund (IMF) and World Bank meetings, Yi said the size of the recent stimulus is neither too small nor too big to cause side effects.
"The stimulus package I think this time will be appropriate in terms of size; when I say appropriate in terms of size, that is, large enough to stabilize the growth but not too large to cause some further negative impact or negative problem in the future," Yi said.
China's economic growth limped to its lowest in more than three years in the second quarter as exports slowed and domestic demand struggled to take up the slack.
In September Beijing gave the green light to 60 infrastructure projects worth more than $150 billion though it has not labelled it as a formal fiscal stimulus package.
Chinese banks are expected to have made 650 billion yuan ($103 billion) of new loans in September, cooling from August's robust 703.9 billion yuan though still sharply higher than July's 540.1 billion yuan - the low point of the year so far.
Yi also said the central bank is not imposing any inflation targets which he believes is not appropriate for the Chinese economy.
"To tell you the truth, the inflation targeting is probably more appropriate for small, open economy. And, if you look at larger economy in the world, like the United States and Japan, for developing countries like India and China, you see the U.S. and Japan they somehow do not use inflation targeting. And India and China do not use inflation targeting. If you really think about there is a logic in it, " Yi said.
Last week, state news agency Xinhua reported China's central bank governor had warned that quantitative easing policies worldwide could cause inflationary risks.
Recent Chinese data offered a sign that G4 policy easing was being felt in the world's second biggest economy, with trade numbers showing exports growing at roughly twice the rate expected in September while imports returned to the path of expansion.
When asked if the central bank has any roadmap to internationalize the yuan currency, Yi said it entirely depends on the market's needs.
"The internationalization of Renminbi is entirely a market driven phenomenon. I don't promote it," Yi said.
"In the past, China restricted using Renminbi; that's not fair. So, what the central bank did is just remove some barriers for using Renminbi. If our trade partner or investment partner like using Renminbi, why not? So, I would like to only create a level of playground to make it an equal competition between the major convertible currencies and the Renminbi, and to let our trade partner or investment enterprise to choose themselves according to market condition," he added.
The IMF and World Bank meetings kicked off on Friday (October 12) and run until Sunday.
Yi is one of the few high-level delegates from China to the IMF meetings held in Japan, whose relationship with China deteriorated to the lowest level since mid-September when the Japanese government nationalized disputed islands in East China Seas, which both Tokyo and Beijing claim ownership. - Copyright Holder: REUTERS
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