Chinese Premier Wen Jiabao and the Communist Party’s Politburo pledged to maintain a “moderately loose” monetary policy, countering speculation that surging loans and asset prices will trigger a tightening.
The Politburo, the party’s top decision making body, said current policies will continue, state television reported today. The economy is in a crucial phase and shows “positive signs,” Wen said in a report by the state-owned Xinhua News Agency, posted on a government Web site.
China’s new loans more than tripled to $1 trillion in the first half from a year earlier, helping to drive a 95 percent gain in the Shanghai Composite Index from last year’s low in November. The government is balancing the need to create jobs and stoke economic growth after a slump in export demand against the risk of bubbles in stocks and property.