China's economy should be undented by the steep fall in the country's stock market, but private investment and consumption must pick up for the recovery to be sustainable, a senior government economist said on Monday.
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Chen Dongqi, vice-head of the macro-economic institute under the National Development and Reform Commission (NDRC), said the government should not make policy decisions based on volatile stock market movements.
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Beijing would hold fast to its "appropriately loose" monetary policy until the recovery is on solid ground, he added in comments at the Reuters China Investment Summit.
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"There is pessimism for the market to have fallen so much in one month," Chen said at the summit in Reuters offices in Beijing. "But this should not change the trend of the economic recovery."
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The stock market fell 22 percent in August, its second-biggest monthly loss in 15 years.
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"Sometimes rises in the market are irrational and sometimes falls in the market are irrational," he told Reuters.
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"How should government policy respond to this? Premier Wen (Jiabao) has already said many times that we will unswervingly apply an appropriately loose monetary policy, and there is no change here, and this is the way it should be."
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(Courtesy to Reuters)
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