China Economic Update

China's central bank on Monday pledged to make full efforts to keep economic growth, employment and prices stable with effective monetary and credit policies.

In its first-quarter monetary policy report, the People's Bank of China said it will combine the implementation of its domestic demand expansion strategy with deepened supply-side structural reform, and use policy effects to stimulate the vitality of business entities.

The central bank will make the country's prudent monetary policy more targeted and effective, and maintain reasonably ample liquidity to expand domestic demand and provide solid support for the real economy, the report said.

The establishment of an institutional mechanism to ensure the supply and stabilize the prices of food and energy will be supported to keep prices basically stable.

Efforts to deepen market-based interest rate reforms will continue in order to maintain a reasonable and moderate interest rate level.

The renminbi's exchange rate will remain generally stable at an appropriate and balanced level, and the bottom line of no systemic financial risks will be safeguarded, according to the report.

It also noted that the triple pressures of shrinking demand, supply shocks and weakening expectations have been eased, economic growth has been better than expected, market demand has been gradually recovering, and economic development has shown an upward momentum.

China's aggregate supply and demand are generally balanced, its monetary conditions are reasonable and moderate, residents' expectations are stable, and there is no long-term deflation or inflation basis in the country, the report said.

China's value-added industrial output, an important economic indicator, went up 5.6 percent year on year in April, data from the National Bureau of Statistics showed Tuesday.

The growth rate was 1.7 percentage points higher than that of March, the bureau said.

In April, the industrial production was generally stable, and the equipment manufacturing sector grew rapidly, said the bureau.

The industrial output is used to measure the activity of large enterprises each with an annual main business turnover of at least 20 million yuan (about 2.88 million U.S. dollars).