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Global slowdown poses risks to China's growth

Global slowdown poses risks to China's growth

China's economy remains sound but faces risks from the slowdown of the global economy because of its reliance on overseas demand, the central bank governor said Sunday.
Zhou Xiaochuan said in a report to the country's legislature, the National People's Congress, that the central bank will strengthen supervision of China's banks and develop contingency plans to deal with any negative impact from the global financial crisis, the official Xinhua News Agency reported.
He said the central bank will also work to maintain a sufficient supply of credit on the domestic market, it said.
Zhou said the central bank will let the market play a "bigger role" in deciding interest rates and keeping exchange rates stable, Xinhua said, without providing details.
Zhou noted that "our economy is highly reliant on overseas demand" and warned that weaker exports resulting from the global slowdown would have a negative impact, Xinhua said.
After years of straining to meet soaring demand for its exports, China is grappling with slowing demand as consumers in the U.S. and Europe cut back on spending in the wake of the mortgage-debt meltdown. That poses an acute challenge for leaders in Beijing who are struggling to keep job-creating growth on an even keel.
Zhou's remarks come days after the government reported that the economy expanded by 9 percent in the third quarter, its slowest pace in five years. The news prompted a new wave of measures aimed at aiding the sectors hardest hit by the fallout from the mortgage-lending debacle in the U.S.
Zhou also said the central bank would monitor the real estate sector and work to improve financial services for it, after authorities announced this past week a raft of measures to revive China's weakening housing market. Property accounts for a tenth of all economic activity in China and has wide repercussions for many other industries, such as steel, appliances and the service sector.


Updated : 2020-12-03 02:19 GMT+08:00