Foreign central bankers observe China economy

Toshihiko Fukuis,Governor of Bank of Japan, Japan's central Bank, is confident about the prospects of both a soft landing of China's economy and the fast growth of the US economy.

He told the Committee on Financial Affairs of the House of Representatives of Japan that though the concern about the steep oil prices still existed, China would succeed in slowing down its economy. He believed China was switching as anticipated toward a market oriented economy.

His remarks is coherent with the statement of the Bank of Japan whose outlook is even more optimistic than that of Japan's financial market.

Financially, the RMB exchange rate is attracting the world¡¯s attention as China's economy is increasingly merging into the global economy.

On November 15 Paul Jenkins, Senior Deputy Governor of the Bank of Canada, said in a speech at Broke University that China need a more flexible forex mechanism.

He proposed a monetary policy framework similar to that of Canadian. Many emerging economies have adopted flexible forex regimes which serve the target set for inflation, but yuan¡¯s pegging at US dollars is an exception. Given this, he urged China to have a flexible forex system in place gradually to bridge the gap with the global market.

Mr. Jenkins said that a coordination between specific inflation targets and flexible forex system enabled monetary authorities to secure stable prices when the market was threatened by domestic or foreign factors.

Such a monetary policy framework, he argued, would enable China to continue its appeal to foreign capital needed to boost its economy while keeping its independent monetary policy.

By People's Daily Online