Xinhua News Agency

Economy on mend, says bank official

PUBLISHED : Thursday, 11 November, 1993, 12:00am
UPDATED : Thursday, 11 November, 1993, 12:00am

MORE signs have emerged showing that the Chinese economy has further improved and that the austerity plan introduced four months ago has been largely suspended.

According to a report by Xinhua (the New China News Agency), the vice-governor of the People's Bank of China Dai Xianglong confirmed that the initial success achieved by the austerity plan had set the stage for a ''sustained, high-speed and healthy'' development of the economy.

Mr Dai said the focus of macro-level adjustments had shifted from control over unauthorised loans and overspending to the reform of state-owned industry.

''As the main direction of macro-economic adjustment has shifted gradually towards building up a market [system], enterprise reform will become the key link [in China's reform], especially as we are going to implement reform measures in our investment structure, finance, taxation, foreign trade and state-owned assets next year.'' He said the bank had seen a steady decline in money supply.

By the end of October, the growth rate of money supply had dropped to 38.6 per cent - a 15 per cent reduction from the first half of this year.

Saving deposits recorded a healthy increase in the past few months.

From July to October, savings increased by 144 billion yuan (HK$193 million), of which as much as 97.4 per cent were fixed deposits, Xinhua said.

At the same time, deposits by enterprises were also reported to have increased by October, Mr Dai said.

He said deposits by enterprises stood above 600 billion yuan.

Exchange rates have also stabilised at around US$1 to 8.7 yuan.