(Writes through, adds PBOC spokesman comments)
BEIJING Oct 10 China will work with other
central banks to deal with the global financial crisis, and also
strengthen efforts to boost domestic demand and safeguard
growth, the central bank said on Friday.
China cut interest rates and lowered banks' required
reserves on Wednesday as part of a coordinated drive by global
central banks to stop a free-fall in world financial markets.
It was Beijing's second rate cut in under a month to help
prop up growth, which slowed to 10.1 percent in the second
quarter from 11.9 percent in all of 2007 and has been clearly
"We will strengthen cooperation with international financial
institutions and central banks to jointly combat the global
financial risks and crisis," Li Chao, spokesman at the People's
Bank of China, was quoted by state television as saying.
He added the central bank would adjust its monetary policy
to meet global and domestic economic changes.
His remarks came hours after a statement on the central
bank's third-quarter monetary policy meeting, which concluded
that China was not optimistic about the international outlook.
But, with $2 trillion in foreign exchange reserves, the country
is sheltered from the worst of the global storm.
The PBOC said the meeting had been dominated by a discussion
of the market meltdown and the possible fallout for the world's
"China's national economy is moving in the desired direction
in line with macroeconomic control measures, and the financial
system is safe and stable," it said in a summary of the meeting
posted on its website (www.pbc.gov.cn).
"The overall situation is good."
The PBOC also said China would further improve the
coordination of monetary, fiscal, industrial, trade and
financial regulatory policies to hasten the restructuring of its
economic model, which relies heavily on exports and related
"China will forcefully boost domestic demand and promote a
move towards basic balance in its international payments," the
China's export sector is a big generator of jobs, but
critics say the country's huge trade surplus is one of the root
causes of the current global crisis.
The proceeds of the surplus, which reached $262 billion in
2007, are largely invested in U.S. bonds, giving America an
ample flow of cheap savings that has enabled its consumers and
homeowners to indulge in a fateful debt binge.
The summary, as usual, was stronger on generalities than
specifics. It said China would pursue flexible and prudent
macroeconomic policies to create a favourable monetary
environment for stable and fast economic growth.
The statement made no mention of the yuan, whose rise
against the dollar has ground to a halt in the past three months
as Beijing has sought to give its harried exporters a breathing
(Reporting by Zhou Xin and Langi Chiang; Writing by Alan
Wheatley; Editing by Andy Bruce)