27.05.2011, 13:42
China High Saving Rate May Trigger Overheating: Central Bank Governor
OREANDA-NEWS. May 27, 2011. China's high savings rate may lead to increased investment, which could in turn trigger economic overheating or asset bubbles, said Zhou Xiaochuan, governor of the People's Bank of China, the country's central bank, at a forum.
Zhou called for caution against "cyclical issues" brought by the high savings rate while delivering a speech at the Lujiazui Forum in Shanghai.
The Chinese government needs to shift to a prudential regulatory framework "as early as possible" to strike a balance between supporting economic growth and taming inflation amid rising consumer prices, he said.
Unlike developed countries, China now requires more prudent macroeconomic policies, as the country has taken the lead in recovering from the global financial crisis, said Zhou.
To implement a prudential macroeconomic regulatory framework, China should work to enhance financial stability, which may require financial institutions to have stronger capital bases, he said.
Zhou called for caution against "cyclical issues" brought by the high savings rate while delivering a speech at the Lujiazui Forum in Shanghai.
The Chinese government needs to shift to a prudential regulatory framework "as early as possible" to strike a balance between supporting economic growth and taming inflation amid rising consumer prices, he said.
Unlike developed countries, China now requires more prudent macroeconomic policies, as the country has taken the lead in recovering from the global financial crisis, said Zhou.
To implement a prudential macroeconomic regulatory framework, China should work to enhance financial stability, which may require financial institutions to have stronger capital bases, he said.
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