Pressure on China to tighten monetary policy and macroeconomic controls is easing as inflation will be “relatively low” this month due to slowing food-price gains, Chinese central bank adviser Song Guoqing (宋國青) said.
Compared with January and last month, the pressure “has in my view, been relieved,” Song said at a forum in Beijing on Saturday.
“That’s good news for growth,” he added.
He estimated first-quarter economic expansion will accelerate to 8.3 percent.
The People’s Bank of China (PBOC, 中國人民銀行) drained cash from the financial system in each of the two weeks since the Lunar New Year holiday ended on Feb. 15, boosting speculation that it was tightening amid concerns inflation was accelerating and real-estate price gains were excessive.
The measures “will lead to downside risks to property prices and investment, but the effectiveness of the policy depends on whether the money supply will be tightened as well,” Zhang Zhiwei (張智威), chief China economist at Nomura Holdings Inc in Hong Kong, said in a note on Friday.
Monetary policy will probably tighten “in the next several months,” which will slow economic growth, he said.
Chinese Housing Minister Jiang Weixin (薑偉新) said he was confident the government will be able to control home prices, the Shanghai Securities News reported on its Web site on Saturday.
Jiang, a member of the Chinese People’s Political Consultative Conference, spoke in Beijing on the eve of that advisory body’s annual meeting.
China’s economy expanded 7.9 percent in the final three months of last year from a year earlier, the first pickup in two years.
The pace may accelerate to 8.2 percent in the three months through this month, according to the median estimate of 23 analysts surveyed by Bloomberg News last month.
Zhang predicts expansion of GDP will ease to 7.3 percent in the second half of the year.
Song, a professor at Peking University, on Saturday said he expects first-quarter growth will be higher “mainly because the comparative base in the first quarter of last year is very low.”
The property tightening measures were announced too late to affect expansion for the period, he said.
GDP climbed 8.1 percent in the first three months of last year from a year earlier, down from 9.7 percent in the first quarter of 2011, according to previously released data from the National Bureau of Statistics.
Song, one of three academics who sit on the PBOC monetary policy committee, said “low inflation” is still the main objective for China’s monetary policy.