China to Maintain Fiscal, Monetary Policies Until Next Year

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Dec. 8 – China has confirmed that it would maintain its current fiscal and monetary policies until next year to sustain economic growth during the annual Central Economic Work Conference Monday.

The year 2010 is the last year of Beijing’s 11th five-year plan so the decision to continue with current stimulus plan is not only good news for China but for the rest of the world counting on the China market to augment sagging Western demand.  Attending high ranking policymakers and officials during the three-day conference agreed that the global financial crisis has highlighted the urgency to transform the country’s economic development policy reports China Daily.

“Not mentioning any exit strategy serves as the best news for the world economy,” said Zhang Xiaojing, senior economist with the Chinese Academy of Social Sciences’ Institute of Economics told China Daily. The stimulus package has been the driving force of China’s growth during the year despite slowing export demand. As a result it will be able to meet its goal of 8.3 percent growth for the year with a forecast of 9.1 percent for 2010, according to the Chinese Academy of Social Sciences.

China’s relatively easy monetary policy will also be continued to allow for the development of international and domestic economy.  During the first 10 months of the year, new yuan loans reached RMB8.9 trillion compared to last year’s RMB4.2 trillion.