During Monday's conference and the following question-and-answer session, Zhou Xiaochuan's talks were rather academic and were mainly about the rationale of China's current monetary policy.

Although China has been studying the monetary policies of countries with mature market economies, the goals of China's monetary policy are still different from those countries, Zhou said.

He said at the current stage, China could not pick controlling inflation as the monetary policy's sole target.

"We have to consider other goals, such as economic growth, employment and the country's balance of payment," he said

Zhou said he had heard comments about PBOC's lack of independence in formulating monetary policy.

He pointed out that China's monetary policy has been supportive to the country's overall development and reform agenda.

Responding to a question about China's high savings rate, Zhou said there was still no clear answer to the root cause. The savings rate has climbed to 50 per cent from 40 per cent a decade ago.

The high savings rate means enterprises are able to obtain investment relatively easily. But it can also contribute to many unnecessary copycat projects, he said.

On the consumption side, experts have said the high savings rate means that the country still cannot rely on consumption as an important driving force for growth as it has been.

Zhou said the tentative explanation for the growing savings rate was that it was triggered by reforms in such sectors as housing and social security.

These reforms are absolutely beneficial for both economic growth and personal income in the long term, Zhou said.

Now that the reforms have been started, they must be implemented in full, he said.

However, the reforms may have prompted many people to increase their savings to prepare for uncertainties, Zhou said.  

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