By (Chinadaily.com.cn)
Updated: 2007-07-09 13:54

The People's Bank of China recently vowed to continue applying consistent and moderate tightening monetary policies for the rest of the year. But these policies are not directly aimed at cooling the stock or property market, according to Wu Xiaoling, deputy governor of the central bank.

Wu said the central bank is concerned about the price hike of assets and will probe into the source of inflation. In order to keep prices stable, the central bank will regulate currency supply by imposing certain liquidity control on the capital market. But monetary policies will not directly target the price of assets.

Statistics show that in May the price of property in China's 70 major cities rose by 6.4 percent year-on-year and was the highest since last December. In the mean time, the benchmark Shanghai Composite Index surged 42.8 percent higher than last December.

The nation's overall CPI in May rose by 3.4 percent, the highest level in the past 27 months, reaching or even going above regulator's "red line" of three percent for three months in a row, according to the statistics.