Risks to the Chinese economy, such as exchange-rate volatility, accelerating inflation and an over-heating property market could lead China to tighten monetary policy next year, according to Sheng Songcheng, an adviser at People's Bank of China. "The current monetary policy may have been a bit too loose", but tightening monetary policy too much would lead to market turmoil, Sheng said. The central bank has already cut interest rates twice this year in response to slowing economic growth.
Risks to the Chinese economy, such as exchange-rate volatility, accelerating inflation and an over-heating property market could lead China to tighten monetary policy next year, according to Sheng Songcheng, an adviser at People's Bank of China. "The current monetary policy may have been a bit too loose", but tightening monetary policy too much would lead to market turmoil, Sheng said. However, an economic work conference said China would maintain a prudent and neutral monetary policy and proactive fiscal policy to limit financial risks and asset bubbles.