Financial statistics issued by China’s central bank show that in June both M2 (broad money supply) and M1 (narrow money supply) rose higher, 0.32 percentage points and 1.64 percentage points respectively, than those in May and are respectively up 17.06 percent and 20.92 percent compared to those in the same period of last year.

 

These changes indicate that currency supply is accelerating at top gear. It is a signal that China’s rapidly growing economy is at a greater risk of becoming an overheated one, experts comment.

 

Under such circumstances, experts urge China to issue restrictive monetary and financial policies as soon as possible. Some analysts predict that such a restrictive financial policy will be given top priority.

 

As for the increased liquidity, some analysts think that issuing government securities and other governmental bonds can solve the problem.

 

For more details, please read the full the story in Chinese. (

http://www.eeo.com.cn/finance/other/2007/07/12/75761.html)

(China.org.cn July 12 2007)