China's central bank stresses credit boom should go to real economy

BEIJING, May 15 (Xinhua) -- China's central bank has asked lenders to
ensure credit goes into the real economy, saying that risk control and credit
expansion were equally important.

"We can't rule out the possibility that some money has flowed into the
stock market, a situation that deserves close government monitoring," Guo
Tianyong, professor at the Central University of Finance and Economics, said
Friday.

He also said that at present, money velocity in China -- the rate at which
money in circulation was used to buy goods and services -- was slow. He said
this perhaps indicated that some of the money might not have gone into the real
economy, but had instead flowed from the banking system directly into the stock
market.

The request was posted in a notice on the People's Bank of China (PBOC)
website Thursday. The country's credit boom this year reflected the relatively
easy monetary policy and helped reduce deflationary expectations and boost
confidence to ensure stable economic growth, according to a joint meeting of the
PBOC and the China Banking Regulatory Commission held Wednesday.

The meeting also stressed banks should better scrutinize risk and ensure
that money flowed into the real economy to meet the capital demand of industrial
restructuring. Banks should continue to improve credit structure and capital
adequacy.

Chinese banks lent 5.17 trillion yuan (760.29 billion U.S. dollars) in the
first four months of the year, exceeding the 5 trillion yuan full-year target
set early this year.

Liu Yuhui, an economist with the Chinese Academy of Social Sciences, told
Xinhua Monday that new bank loans could reach about9 trillion yuan this year.

The PBOC said in its quarterly monetary report on May 6 that China's
economy had done "better than expected" in the first quarter and pledged to
maintain "ample" liquidity in the financial system to ensure economic recovery.

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Chinese official: No misuse of stimulus funds

Special Report:Global Financial Crisis

BEIJING, Feb. 19 (Xinhua) -- An official of China's
National Audit Office (CNAO) said Thursday that the agency had not found any
serious misuse of economic stimulus funds, but he vowed to step up supervision
to ensure economic and social stability.

"I am gratified to tell you that the government
policies have been implemented well across the local departments, and swift
measures have been taken to ensure economic growth," Liu Jiayi, the head of
CNAO, told reporters.

The audits focused on whether funds were used in line
with industrial restructuring policies, and whether the money went to
high-pollution or energy-intensive projects.

Expensive projects and those concerning environmental
protection, as well as money spent to tackle public emergencies, would be
closely watched, he said.

Expenditures to improve living standards, including
farm subsidies and investments in drinking water projects, would be fully
audited, he said.

China unveiled the 4 trillion yuan (580 billion U.S.
dollars) stimulus package in November to revive the economy. Growth slowed to
6.8 percent in the fourth quarter.

Auditors will reveal extravagance, large losses and
waste in stimulus spending, as well as other serious violations and crimes, Liu
said.

Although no major problems were found during the
audits, "there was still room to improve," he said.

He noted that money hadn't become available quickly
enough in some underdeveloped areas with limited fiscal revenue, and overlapping
construction persisted in some areas due to poor planning.

About 6 billion yuan was misused in 2008. Most of the
money has been confiscated, according to Liu.

"We will hit hard against violations. No mercy will
be shown when dealing with illegal activities," Liu said.

Liu said the CNAO would start a full-scale audit this
year of how funds were used for the Beijing Olympic projects. The income and
expenses of the Beijing Organizing Committee for the Games of the XXIX Olympiad
(BOCOG) would also be audited.

Last year, selective audits were conducted on several
Olympic projects and irregularities were found "in one or two"-- meaning very
few, Zhang said, without giving details. He added that the BOCOG had made
immediate corrections.

The CNAO was now focused on checking the quality,
fund management and land use of reconstruction projects in quake-stricken
Sichuan Province, said Zhang.

Teaching kids to save money amid worsening financial situation

Special Report:Global Financial Crisis

BEIJING, Feb. 7 (Xinhua) -- Chinese parents have found it difficult but necessary to teach their children some financial lessons, starting tightening their purse strings amid the worsening financial situation.

Zeng Huaying, mother of a ninth grader in Xiamen, east Fujian Province, managed to persuade her 14-year-old son Tang Ling to pool all his red-packet money - traditionally given to children in red envelopes during Spring Festival to ward off evil spirits - into a finance management scheme.

Zeng, who works for an auto service company, was quoted by China Daily as saying that her year-end bonus had been halved because of the financial crisis, which partly prompted her to start expounding money management techniques.

Last month, she helped her son open his first bank account.

Tang said his classmates usually go crazy shopping with their red-packet money, splurging on things ranging from Haagen-Dazs ice cream to 1,000-yuan (about 146 U.S. dollars) Xbox game consoles.

But with the financial situation worsening, more parents have started tightening their purse strings.

A survey conducted by Jrj.com, a financial information website, and the Legal Evening News showed that 87 percent of respondents would like to start saving for their children's education.

Xia Xueluan, a sociologist at Peking University, was quoted by China Daily as saying that parents should help their children learn more about financial responsibility so they will be productive to society when they grow up.

Tang has deposited about 2,000 yuan of his red-packet money in his bank account and paid 1,000 yuan for health insurance policy.

His financial foresight does not stop there. "I'm going to save for college from now," he said.