China's economic fundamentals 'solid, resilient'

(Bloomberg)
Updated: 2008-10-14 09:53

China's economic fundamentals are "solid and resilient," financial institutions are "sound" and there is "ample" liquidity in the Chinese market, central bank Deputy Governor Yi Gang said.

"In 2008, China has weathered through the shocks of natural disasters and adverse external environment," Yi said on Monday in a speech at the annual meetings of the International Monetary Fund and the World Bank in Washington. "We maintain a relatively strong economic growth. Exchange rate flexibility has increased."

The country had the worst snowstorms in half a century in January and February, followed by the deadliest earthquake in 32 years in May and rains and floods in the nation's south in the summer. Economic growth slowed for a fourth straight quarter in the three months ended June 30 as exports cooled.

The economy, the world's fourth largest, grew 10.1 percent in the second quarter from a year earlier. Consumer prices rose 4.9 percent in August, the least in 14 months. The central bank has cut interest rates twice in a month. It has also reduced the proportion of deposits banks must set aside as reserves and trimmed the pace of currency gains.

"Facing the slowdown of the world economy, our policy is to expand domestic demand," Yi said. "China will continue its cooperation with the international community and call on all governments to join efforts to overcome the present difficulties."