China should fine-tune macro-economic controls by easing restrictions on money lending and raising interest rates when necessary, the China Securities Journal quoted the State Development and Reform Commission (SDRC) as saying Wednesday.

“The government should fine-tune its macro-economic polices in a timely and appropriate manner to achieve coordinated development,” the SDRC, one of the country’s top government think tank, said in a research report.

Before a nationwide taxation reform, the government should continue spending in the less-developed central and western regions and spend more on public utilities, the SDRC said.

Curbs on working capital and medium and long-term loans to enterprises should be relaxed while medium and long-term interest rates should be raised when necessary, it said.

The government should increase investment in infrastructure, education and environmental protection, especially in underdeveloped rural areas, the report said.

However, the People’s Bank of China, the country’s central bank, has repeatedly pledged to keep its policies.

On Tuesday, Xinhua News Agency cited central bank governor Zhou Xiaochuan as saying that the bank would continue to use monetary tools to control money supply.

(Shenzhen Daily October 28, 2004)