The consumer price index (CPI), and not asset prices, is the major factor in decisions regarding raising interest rates, suggested Zhou Xiaochuan, chief of the People's Bank of China.
Zhou said the central bank is focused on the constantly rising CPI in considering adjusting interest rate, while asset prices do not fit the gauge.
He presented at a Q&A session at a seminar to the central financial system delegation of the 17th National Congress of the Communist Party of China.
Financial management should rely on market mechanisms and approaches, reminding commercial banks to be alert to risks, Zhou added.
Meanwhile, Zhou indicated that the government still needs time to allow mainland individual investors to go to the Hong Kong bourse directly.
(Chinadaily.com.cn October 17, 2007)
