Friday, January 14, 2000 BANKING

Money supply soared for Y2K MARK O'NEILL in Beijing

The central bank issued 44 billion yuan (about HK$41.11 billion) in cash last month - or nearly 20 per cent of its money issue for the whole year - as an insurance against the millennium bug. The Financial News yesterday published the bank's report for the fourth quarter of last year which said that the amount of cash in circulation, M0, reached 1.34 trillion yuan at the end of the year, an increase of 20.1 per cent from year earlier.

The total amount of cash issued during the year was 225.1 billion yuan.

"The main reason was to put more money in the hands of people who were nervous of the effect of the millennium bug," the bank said. "After January 1, this money gradually returned to the banks."

The figures showed the failure of the bank's efforts to persuade people to spend, not save.

Deposits belonging to individuals reached 5.96 trillion yuan at the end of the year, an increase of 11.6 per cent over a year earlier.

The net increase was 625.3 billion yuan, compared to 761.5 billion in 1998.

Separately, the State Economic and Trade Commission yesterday published its forecasts for this year.

It said that gross domestic product would grow 7.5 per cent, up from 7.1 per cent last year, retail consumer sales would increase 7 per cent to 3.32 trillion yuan, fixed-asset investment would rise 12 per cent to 3.5 trillion yuan and foreign trade 8 per cent to US$210 billion.

It said that the retail price index would stay flat this year. The index fell for 26 consecutive months up to last month.

The Economic Daily quoted Vice-Minister for Construction Song Chunhua as saying the value of apartments sold to individuals rose last year 30.4 per cent against 1998

http://www.insidechina.com/frames/frames.php3?url=http%3A%2F%2Fwww.scmp.com%2FNews%2FBusiness%2FArticle%2FFullText_asp_ArticleID-20000114013033560.asp

-- Martin Thompson (Martin@aol.com), January 14, 2000

Answers

Is it fiat money? I know they have tons of gold. Does gold back their paper? Considering they're moving into Panama, so we'll be neighbors, and if their money is backed by gold, unlike ours..I may wanna get me some, heh.

-- Hokie (Hokie_@hotmail.com), January 14, 2000.