MNI Exclusive: Growth May Rebound in 2H: PBOC Policy Member

     BEIJING (MNI) - China's economy is likely to bottom out in the second

quarter and may even rebound in the second half of this year, Liu Shijin, a

member of the Monetary Policy Committee of the People's Bank of China, told MNI

in an exclusive interview.

     Growth is likely to be kept above 6% in the next two years, then slow to

5%-6% in the years beyond 2020, said Liu, also a member of the Chinese People's

Political Consultative Conference, which began its annual session on Sunday in

Beijing.  

     Liu, who advised officials including premiers, said China should always

keep its monetary policy prudent and neutral, and seemingly dismissed

suggestions for more monetary loosening to boost growth. 

     "What should be stressed is that the potential growth rate cannot be helped

even with a quite loose policy, and the slowing growth at the current stage is

in line with economic rules," Liu said. 

     "In general, the monetary policy hasn't been tight in years, and was even

moderately loose at times, otherwise China wouldn't have had excessively high

leverage ratios," Liu said. 

     A bigger priority is improving the transmission of monetary policy, without

which some companies won't be able to receive credit even with a loosening

approach, Liu said.

     The current preferential credit policy directed toward helping small

private businesses is such a measure to smoothen the policy's transmission, Liu

said.

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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