Too early to judge effect of austerity drive, say experts

IT is too early to judge the effectiveness of China's current moves to tighten the economy, economists have warned.

The warning followed recent press reports citing Chinese officials as saying that the country was already feeling the effects of the government's austerity measures.

Officials had also released economic figures which seemed to suggest progress in the drive to cool the overheated economy.

''We're starting to see some positive signs, but it is too early to say whether the measures will turn out the expected effects,'' said Benjamin Chan Sau-san, head of economic research at the Bank of East Asia.

So far, the positive signs included a brake on the yuan's fall and a rise in savings with four specialised banks last month, he said.

''But these are just piecemeal figures which do not give a whole account of the economy, and they are also mostly up to only July or the first half,'' he said.

''What we also need to know is whether construction development has slowed down, whether inflation has fallen, and whether the balance of payment has improved.'' Mr Chan said figures for this month and next should also be looked at to decide if the austerity measures were effective.