Whether the People's Bank of China (PBC) will raise the interest
rate again is still undecided, revealed yesterday by Yi Gang,
assistant to the governor of the PBOC, the Shanghai Securities
News reported today.
It is same in regard to whether allow Chinese mainland investors
to invest in the Hong Kong bourse directly and the deposit
insurance system is still under research. Yi made the remarks at
the third Beijing International Finance Expo, also known as the
2007 annual conference of the China International Finance
Forum.
The October consumer price index (CPI) is to be unveiled next
Tuesday. Between January and September this year, the CPI grew 4.1
percent year-on-year, significantly exceeding the annual target of
three percent set by the government.
Although September's CPI growth was a reported 6.2 percent, down
0.3 percentage points from the peak of August's 6.5 percent, it is
estimated that October's CPI will rebound, raising pressure on the
central bank for yet another interest hike at the end of this
year.
Nonetheless, Zhou Xiaochuan, the governor of the PBOC, suggested
this Tuesday that China's worsening inflation situation will look
improve in the last quarter and the central bank won't retrench the
monetary policy before the economic figures come out.
In Yi's speech, he also noted small and medium enterprises,
citizens, as well as migrant workers need more help from banking,
securities and insurance services, while large firms have more
opportunities to access direct financing in the capital market. The
retail businesses for small and medium enterprises and individual
investors therefore are set to become the focus for the financial
industry.
In the meantime, Yi emphasized that financial institutes should
strengthen education on individual investors in shouldering risks
while they are seeking more returns rather than interests from
deposit.
(Chinadaily.com.cn November 9, 2007)
