Global imbalances pose a serious challenge to China's economy and financial system, a senior central bank official said on Friday. Tang Xu, head of the central bank's research bureau, also described the pace of economic growth in the first half as "relatively high".
A state-owned newspaper reported on Thursday that annual gross domestic product growth accelerated to 10.9 percent in the second quarter from 10.3 percent in the first three months. Speaking at a conference, Tang cited Chinese media reports that first-half GDP grew 10.8 percent. It was unclear which media he had in mind.
For the whole year, the economy was likely to grow by just over 10 percent, Tang told reporters later.
Growth is being powered by an investment boom financed in part by the proceeds of China's record trade surpluses, which Tang said were due in large part to the shift of global manufacturing capacity to China. Fifty-five percent of China's exports were produced by foreign-owned companies, he noted.
"We see global imbalances as a natural phenomenon. But the intensification of the imbalances is posing a serious challenge to China's economy and financial system," he said. Speculation is mounting that the central bank will soon respond to these challenges by tightening monetary policy again. It raised lending rates in April and increased banks' reserve requirements last week.
Tang described credit growth as relatively high but said inflation remained low.
Financial markets are also buzzing with talk that China will let the yuan rise more quickly, but Tang declined to comment on whether a change in currency policy was in the offing.
Tang said China would try to boost consumption to better use its vast pool of savings, and quoted central bank chief Zhou Xiaochuan as telling the forum on Thursday that China was pursuing banking and exchange-rate reforms that would help to lay a sound foundation for economic growth.