The policy of economic macro control introduced by the Chinese government in the latter half of last year is "good for the world, especially developing countries," Tang Min, chief economist of Asian Development Bank (ADB) Resident Mission in China, said Saturday.

Tang said that economists were initially worried about the possible negative influence that might be exerted by China's macro-economic control over the regional economy, but judging from economic performance in the first three quarters of the year, "there have been almost no such negative elements."

The Chinese economy showed a growth of 9.5 percent from January to September this year, coupled with a welcome drop in the growth of certain overheated sectors.

Tang said that foreign trade was an important signal of China's adaptation into the world. China has kept a strong momentum in foreign trade, with the country's trade surplus decreasing as a result of increased imports. The country has made a positive contribution to the world's economy, he said.

China is now the world's third largest import market or the largest import market in Asia.

"Foreign investment has also increased, which shows that China's economy has provided plenty of opportunities to foreign investors, who haven't lost their confidence in the Chinese economy because of the government's macro-control policy. Foreign investors are more concerned with medium- and long-term development. Major fluctuations in the Chinese economy will be bad for foreign investors," said the ADB chief economist in China.

In the past several months, China issued a series of policies to encourage domestic enterprises to invest overseas. Tang held that it would be a "win-win" deal for developing countries, because they need funds and more employment opportunities, and China has been struggling to find new outlets for its capital, technologies and products.

As China has loosened some of its restrictions on overseas investment, more Chinese companies make such investments, contributing to the world economy.

Since the latter half of last year, the Chinese government has adopted a range of measures including limiting money supply, tightening land administration and limiting the scale of credits and loans.

Tang said that judging from present performance, China has kept a normal economic development while at the same time restricting the unhealthy part of the economy.

He said China should continue its macro control to maintain the healthy growth of Chinese economy.

Though prices have continued to rise, but "they might come down in the next two months," he said. But in the medium and long term, China will inevitably face the pressures of inflation from rising oil and energy prices and increased labor costs, he said.

Backgrounder: macro-economic controls in China

China's central government has initiated contractive macro-economic controls five times since the reform and opening-up drive was launched in 1978, each time in an effort to push the economy toward healthy growth.

China entered its fifth period of economic macro-control in the second half of 2003.

The Chinese economy expanded 9.1 percent in 2003, seeing runaway investment in such sectors as steel, cement, aluminum and real estate.

Correspondingly, the government took a host of precautious measures, including restricting banks' lending capacities, tightening land use and reining in investment. Analysts agree that these policies have achieved initial success.

The first four periods of Chinese macro-control -- 1979 to 1981, 1985 to 1986, 1989 to 1990 and the second half of 1993 to 1996 -- aimed to cool down an apparently overheated economy, which each time was growing at a rate of more than 11 percent.

The first economic overheating was reflected by soaring investment and large fiscal deficits caused by moves to spur consumption.

The second, third and fourth were all aftermaths of explosive investment and consumer demand, leading to overall shortfalls of goods. The Chinese government had to harness severe inflation during those periods, especially in 1994 when the consumer price index hit a high of 21.7 percent.