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China concerned over falling US dollar, economy: Wen
Beijing (AFP) March 18, 2008 China is concerned about the falling US dollar and the state of the US economy, but domestic conditions would determine the nation's monetary and fiscal policy, Premier Wen Jiabao said Tuesday. "I am paying great attention to the world economy, I am especially worried about the US economy," Wen said at a press conference at the end of China's parliament. "What I'm worried about is that the US dollar continues to depreciate, when will we see it hit the bottom? What kind of monetary policy will the US take and what direction will its economy take?" With the global economy increasingly linked, fluctuations on the world market were bound to influence China's economic growth, Wen said. The US subprime loan crisis was not only driving down the dollar, but also interest rates and stock markets around the world, Wen said, all the while pushing up the price of oil to over 100 dollars a barrel price. Despite such concerns, Wen said China would continue to maintain a tight monetary policy and a prudent fiscal policy in light of the nation's domestic economic conditions. "The tight monetary and prudent fiscal policy that China is carrying out stems from China's actual situation, mainly characterised by excessive growth in investment, overly fast growth in the money supply and credit and a trade surplus rising too fast," Wen said. Wen said that over the past two or more years, the Chinese yuan had appreciated 15 percent against the dollar and in recent months the pace had been faster. Further adjustments to China's interest rate and foreign exchange rate would only come after the potential benefits and harms of such moves were fully understood, Wen said. "I deeply know that this is a big challenge to China, but I can tell everyone that China's economy is fundamentally sound," he said. "China's market has great potential, there is especially a huge potential in the rural market ... because of this we are fully confident in the development of China's economy." Community Email This Article Comment On This Article Related Links Global Trade News
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