Zhou Sees Downside Risks to 8 Percent Growth Target

Chinese central bank governor Zhou Xiaochuan said there are downside risks to the government's 8 percent economic growth target for this year.

While "most people think it's a reasonable goal," it is difficult to "predict a crisis period," Zhou told reporters today in Basel, Switzerland, where he's attending a meeting of the Bank for International Settlements. "We have risks on both sides."

Chinese exports fell for the first time in seven years in November, imports plunged and industrial output gained the least in almost a decade. Economic growth may slow to 7.5 percent this year, the World Bank estimates. Premier Wen Jiabao is aiming for a minimum of 8 percent growth to create jobs and avoid social unrest.

So far, "in comparison with other countries it's a moderate slowdown," Zhou said. At the same time, "we need to have strong policy making and policy packages to prevent a sharp slowdown."

China has pledged a 4 trillion yuan ($585 billion) stimulus package, cut property transaction taxes, and lowered the benchmark lending rate five times since September to bolster economic growth that was the weakest in five years in the third quarter. The one- year lending rate is 5.31 percent.

Zhou said policy makers need to monitor the effectiveness of the stimulus package to see "whether that is enough or not."