‘Slow global recovery biggest uncertainty for China’

The governor of China’s central bank Monday said a slow world recovery process and the unstable economic and financial situation in Europe will be the biggest uncertainty for China’s economy this year.

“The world economy is highly globalised with a very active flow of capital worldwide. All of these factors will have an impact on our monetary policy,” Zhou Xiaochuan, governor of the People’s Bank of China (PBOC), told a press conference on the sidelines of the ongoing annual parliamentary session, reported Xinhua.

China has maintained a tight monetary policy for several months to prevent the economy from overheating and to fight inflation. Inflation has come down from a three-year high of 6.5 percent last July to 3.2 percent year-on-year as of last month.

Zhou welcomed as “a good thing” China’s trade deficit of $31.48 billion in February and its impact on the yuan. The deficit was the largest in a decade for the world’s second-largest economy, accustomed to enjoying huge trade surpluses.