Central bank boss says scenario does not apply to China The central bank chief has rejected suggestions the mainland has entered a cycle of rising interest rates, saying the central bank would not raise them without good cause. In an interview published on the bank's website yesterday, People's Bank of China governor Zhou Xiaochuan said analysts who concluded such a cycle had begun were making the mistake of treating China's economy the same way they would a developed economy. 'China's economy is in the process of changing tracks from a centrally planned economy to a market economy,' Mr Zhou said. 'Therefore, it will not follow the economic cycles which are signatures of a mature market economy. 'In countries with mature market economies, interest rate adjustments often follow a more cyclical pattern because the economies [of these countries] follow cycles which have distinct characteristics. In one cycle, [the central banks] will raise interest rates, and in another cycle, [they will] lower rates,' he said. 'However, the cyclical pattern of China's economy is not yet stable, and therefore, from an interest rate point of view, we can't say we have entered a certain cycle yet.' Mr Zhou said the central bank would decide its interest rate policies by reviewing the economic situation and with reference to main indicators, such as inflation. In October, the People's Bank of China raised interest rates for the first time in eight years. Mr Zhou said the central bank would only adjust interest rates with good cause - not solely for the purpose of ending 'negative interest rates'. He also said that since Premier Wen Jiabao had made boosting public consumption a policy goal, it would not make sense to have bank rates too high. 'In his Government Work Report this year, the premier made it clear that we want to encourage consumption to stimulate [market] demand,' Mr Zhou said. 'If our deposit rates are too attractive, that would be contradictory to our goal.' On the sensitive issue of exchange rate reforms, Mr Zhou reiterated that Beijing would not bend to foreign pressure to revalue its currency but would continue laying the groundwork for perfecting a mechanism for determining the appropriate exchange rate. 'In looking at our current international balance of payments, the task for the future is mainly to perfect the [mechanism for arriving at the] renminbi's exchange rate, not merely to adjust the exchange rate,' he said. The central bank governor also said China Construction Bank and the Bank of China basically satisfied market requirements for their public listing, despite a string of fraud and corruption cases blighting both banks. But he did not comment on when the banks' initial public offerings would be launched. Until the scandals, the market had expected the first of the listings this year.