China to Keep Credit Tight, Growth Seen Slowing

BEIJING – China’s central bank chief has vowed to keep a tight grip on credit to prevent investment from rebounding, while a state think-tank predicted on Thursday the economy was likely to slow further.

Economic cooling measures had achieved initial results and money supply and credit growth had slowed to a reasonable level, but it was too early for the central bank to relax, said Zhou Xiaochuan, governor of the People’s Bank of China.

“A rebound (in investment growth) is likely to occur if we relax, even by a little,” Zhou said in an Aug. 31 speech posted on the bank’s Web site (www.pbc.gov.cn) on Thursday.

The economy has slowed since the government told banks to keep more money in reserve and restrict lending to over-invested sectors such as property, steel and cement. Local authorities were also ordered to halt unwanted investment development.

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