October 29 saw the
People's Bank of China (PBOC), the nation's central bank,
published the 2001 third-quarter report on the implementation of
monetary policy, in which the possible impact on Chinese economy by
"9.11 Incident" was for the first time revealed in detail.
While a few days ago on the fourth-quarter regular meeting of PBOC
monetary policy committee, attended by PBOC President Dai
Xianglong, Chairman of the China
Securities Regulatory Commission Zhou Xiaochuan and renowned
economist Wu Jinglian, experts pointed out that full attention must
be paid on the negative impact exerted by the terrorist attacks in
the United States on China's economy.
The impact is mainly displayed in the following five aspects,
according to the central bank report.
First, on trade growth. The incident’s impact on export may last
long, that is to say, export will be more difficult from the first
half of next year. Since the incident accelerated and deepened the
economic slowdown of the United States, it may further extend the
force and time of impact on China’s export.
Second, on growth of foreign exchange reserve. Due to increased
difficulty in export, trade surplus may decrease faster so as to
affect growth of foreign exchange reserve. Meanwhile expense on
imported crude oil will increase because of continual surging up of
international oil price, and this may also contribute to deduction
of trade surplus.
Third, on foreign capital flow-in. Because of global economic
depression and the shaken notion to take the United States as the
investment 'haven', international surplus capital may get adjusted
in investment strategy which may benefit China. In other words,
direct investment flow to China may increase in a degree,
encouraged by China’s impending WTO membership. The impact may last
to next year.
Fourth, on the level of exchange rate. Since the exchange rate of
US dollars is still low and the rate of RMB to other currencies
would decrease accordingly to maintain comparative stability, with
the extent expected between 5 to 10 percent, larger than
estimations before "9.11 Incident".
Fifth, on interest rate. After the Incident major industrial
countries all expressed intention to further loose monetary policy
to boost economy. It is estimated within this year the global
currency situation would be further loosed, which may exert a
pressure on the general interest level of China.
( October 30, 2001)