China seeks to cool overheated sectors
(AFP)
Updated: 2006-05-07 09:57
Hyderabad, India -- China's central bank is seeking to
cool down overheating economic sectors such as real estate as well as cut
massive foreign exchange reserves, a top government official revealed.
Chinese vice minister
of finance Li Yong (L), Japanese Finance Minister Sadakazu Tanigaki (C)
and ADB President Haruhiko Kuroda (R) attend a seminar at the Asian
Development Bank (ADB) annual meeting in the southern Indian city of
Hyderabad May 4, 2006. Finance ministers from China, Japan and South Korea
called on Thursday for more financial cooperation among Asian countries
and said they would look further into the idea of regional currency units.
[Reuters] |
The statement by Li Yong, Vice Minister of Finance, at
the annual Asian Development Bank meeting in this southern Indian city came as
he said economic growth in 2006 could hit 9.5 percent without new fiscal and
monetary steps.
The concern about overheating comes after the economy expanded by
faster-than-expected 10.2 percent in the first quarter over the same period the
previous year, after posting a rate of 9.9 percent for all of 2005.
"During the first quarter of 2006 we have tried to balance investments in
certain sectors," the minister told delegates.
"These sectors such as real estate and steel became overheated in 2005. Our
central bank is trying to cool down overinvestment in these sectors," he said.
Housing has become so expensive in China that seven out of 10 urban families
cannot afford their own homes, the state-owned Xinhua news agency said.
In April the People's Bank of China boosted the one-year benchmark lending
rate by 27 basis points to 5.85 percent to brake credit and control "excessively
fast" release of bank loans.
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