China shouldn't tighten policy too early-economist

SHANGHAI, Sept 4 - Tightening China's macroeconomic policy too early would have an adverse impact on the country's economic development, a senior government economist said on Friday.

Fan Jianping, chief economist with the State Information Centre, added that liquidity would remain adequate in the second half of the year.

"In the second half there will not be any major changes to liquidity and it will be sufficient to meet the needs of economic development," Fan told a financial forum.

Chinese bank lending has slowed sharply in the past two months, fuelling worries about liquidity conditions and helping to spark a 20 percent drop in the mainland's benchmark stock index <.SSEC> during August. [ID:nPEK91277]

Fan told the conference that China must achieve the economy's potential growth rate of 9.8 percent for several consecutive quarters and see inflation at the long-term average level of about 3 percent before attempting to alter its macroeconomic policies.

"If China attempts to change macroeconomic policies before these two conditions are met, it would be very adverse for consolidating economic development in the future," he said.