There is no need for China to conduct...>

CHINA PRESS: There is no need for China to conduct QE at the moment, said Sun

Guofeng, a director on the PBOC's Monetary Policy Committee, the Securities

Daily reported on Friday. 

- Sun noted the essence of QE is that the monetary authority improves the

transmission of its monetary policy by purchasing assets in the financial

market. It works for countries whose financial system are dominated by the

financial market. However, China is a bank-led financial system and the

transmission of the monetary policy will rely on regulating banks' behaviours,

the newspaper reported.

-Sun also warned that if the PBOC purchases a large amount of CGBs in the

secondary market, it is equivalent to buying them directly in the primary

market, which could lead to a serious monetized deficit. In the past two

decades, China has experienced three inflations, all related to a monetized

deficit, Sun added.