Renowned Chinese economist Wu Jinglian warned against tremendous risks faced with Chinese investors on the stock market due to the lack of market oriented system which he proposed to set up three years ago.

Wu, also a member of the 10th National Committee of CPPCC, China's top advisory body, expressed his opposition to the favor that the state-owned and corporate shares enjoyed on the stock market. That was not the practice in any other country, he said.

He sneered down the opinion regarding policies as puppet valve of the stock market."Those are nothing but bulls or bears in speculators' eye." He stressed again that a market mechanism be the solution.

When it comes to the monetary policy for this year, Wu still sees bubbles on the capital market. He attributed that to the rising consumer price index and downing interest rates.

Wu rebuked the worries about possible plunge of stock prices caused by adjustment on interest rates. What he is concerned about is the shrinking deposits held by people. Given this, he thinks it is the time to adjust the interest rates.

However, he insists that monetary tools be used to leverage the interest rate. "Administrative tools will not work," he affirmed.

By People's Daily Online