Optimism in China recovery but West still a worry

Central bank chief Zhou Xiaochuan was cautiously optimistic about the mainland's economic prospects yesterday but warned about uncertainties in the pace of recovery in Europe and the United States.

"The growth slowdown has gradually stabilised, with some indicators starting to improve in the third quarter, particularly in September," Zhou said in Beijing yesterday following a group discussion by Communist Party congress delegates from the banking and financial sector. "I personally think the trend has continued in October."

In contrast, the outlook for Western economies remained unclear and it was hard to gauge the possible "spill-over effects" of easing policies adopted by Europe and the US, the People's Bank of China governor said. Fiscal issues that Washington needed to tackle by the end of the year also added to uncertainties, he said.

As a result, Beijing would "maintain some continuity" in its policies next year, but at the same time keep enough flexibility to cope with external challenges.

A gradually recovering mainland economy will allow congress delegates to focus more closely on a once-a-decade leadership transition that will follow the week-long party congress, which opened yesterday.

Zhou's remarks indicate that an accommodative monetary policy and an acceleration in the approval of new investments have helped the world's second-largest economy recover from the global slowdown.

The mainland will today release key monthly economic data for last month, including inflation, industrial production, investment and retail sales.