Vol. 5 Num 156 Thu. October 28, 2004  

China urged to raise rates in policy tweaks

China should fine-tune economic cooling policies by easing state-imposed curbs on bank loans and raising interest rates when necessary instead, a top government think-tank and economist were quoted today as saying.

Debate on whether China needs to relax its tightening policies picked up after data showed the economy expanded 9.1 percent in the third quarter from a year earlier, marking the third consecutive quarter of slower growth.

The government should "fine-tune its polices and measures in a timely and appropriate manner to achieve coordinated development", the China Securities Journal quoted a report by the investment research institute of the State Development and Reform Commission as saying.

The government should maintain a proactive fiscal policy to help sustain spending in the country's less-developed western regions and channel more funds into public utilities, it said.

Worried that an investment bubble could turn economic boom to bust, Beijing has taken a raft of steps since last year, such as forcing banks to hold more money instead of lending it out and ordering a halt to new projects in areas like steel and property.