China's stock market bubbling is worrisome, and the central bank is monitoring asset prices and inflation carefully and closely, Zhou Xiaochuan, governor of the People's Bank of China, said at the Bank for International Settlements (BIS), G10 Governor of Central Bank Conference which was held in Basel, Switzerland.

When asked if he was concerned over the accumulated stock market bubbling, he said "Yes". In order to maintain monetary stability, he noted, "we are paying still closer attention to the consumer price index (CPI), the producer price index (PPI) and the asset prices." He went on to note that China's inflation rate in 2007 is expected to be higher than in 2006, but the situation is still able to be coped with. Loans fail to increase and inflation fails to slowdown, though the rate for savings deposit reserve funds have been up seven times in the past 11 months, he acknowledged. There is still a room big enough, however, to raise the rate of savings deposit reserve funds.

By People's Daily Online