A leading Chinese central banker said that China's economy bottomed out at the fourth quarter of 2008, and it is showing growing signs of revival now.
Yi Gang, vice-governor of the People's Bank of China, the central bank, told reporters in Beijing on Wednesday that an unprecedented high of credit was issued in the first quarter this year, which has helped liquidity in the market, and eased credit lines to capital-depleting medium and small companies in the country.
Initial statistics by the central bank revealed that China's commercial banks lent 4.58 trillion yuan more loans that the same period last year, which rose a hefty 3.25 trillion yuan year-on-year, and as a result, the kind of credit crunch which hamstring the United States and others, did not burden China's economy.
Although some are worried about potential inflationary pressure following the record high of issued loans, Yi played down the concern, asserting the benefits of affluent liquidity outpaces its negatives.
The senior banker also made his estimation that Chinese financial institutions will give out less loans in the following months this year, because credit used to leapfrog in the first quarter in China.
Yi said that there emerged growing signs of economic activity in the first quarter, as deflationary pressure eased in March from the first two months, stock markets gained more than 35 percent, and real estate markets saw signs of stabilization. He added the increasing glimmers of hope have built up consumers' confidence in China's economy.
Yi also believed that the country's GDP will grow faster in the second quarter, as compared with 6.1 percent recorded for the first three months.
However, some Chinese economists have pointed out the weakness in the economy, including its over-dependence on exports, Chinese families depositing too much in the banks while not keen on consumption, and the uncertainties in the world's other major economies, typically, the United States and Europe, which could drag home economy.
By People's Daily Online
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