China continues to curb hot economy

http://www.chinaccm.com 2007-7-23 8:8

    China raises its one-year deposit and loan interest rates by 27 
basis points from Saturday. 

    The move aims to rationalize the growth of lending and investment, 
adjust and stabilize expectancy of inflation and maintain price 
stability. 

    Wang Guogang, professor in finance at the China Academy of Social 
Sciences, says the policy will cool down the heated economy. 

    "The measure is expected to curb the fast-growing loans increase 
to some extent," said Wang. 

    In addition, China will reduce the tax on interest income from 20 
to 5 percent from the middle of August. Experts say this will attract 
more bank savings and is conductive to creating an economy 
characterised by rising investment and controlled inflation. 

    China has been experiencing booming economy during the first half 
of this year, with GDP growing by 11.5 percent and the consumer price
 index rising by 3.2 percent.