BOAO, China, April 11 China's central bank
governor, Zhou Xiaochuan, said on Friday that although credit
growth was stable, the central bank remained vigilant against
the risks from corporate indebtedness.
"We must not lower our guard against the risk of high
leverage in the corporate sector," he said at the Boao
investment forum in southern China.
Zhou elaborated on the factors that influenced the central
bank when it formulates monetary policy, saying that inflation
remained its focus for now.
"Inflation, GDP growth, new jobs and the international
balance of payments are the goals we consider when formulating
monetary policy," he told a panel at the forum, speaking in
"All the factors will be dynamically adjusted based on
changing conditions, and it is difficult to say how to compile
the weightings," he said, adding that ordinarily the inflation
target had the highest weighting.
The comments came after China's Premier, Li Keqiang, told
the Boao forum that sustaining healthy growth in China's labour
market was the government's priority, and it did not matter if
growth came in a little below the official target of 7.5
Zhou appeared to support that sentiment, noting: "There is
the possibility of a bigger adjustment to monetary policy if
growth fully deviates from the target".
Zhou noted that China's central bank needs to be a part of
the government for the country to fulfil its plans for reform,
and there were sound reasons it was not fully independent,
unlike central banks in other major economies.
"If the central bank is not a part of the government, it is
not efficient in coordinating policies to push forward reforms,"
"Our choice has its own rational reasons behind it. But this
choice also has its costs. For example, whether we can
efficiently cope with asset bubbles and inflation is
(Reporting by Aileen Wang in Boao and Kevin Yao in Beijing)