CHINA SHOULD TIGHTEN MONETARY POLICY - MERRILL LYNCH

KUALA LUMPUR, Jan 26 (Bernama) -- China should tighten its monetary policy
to preserve and sustain its economic growth, said Merrill Lynch (Asia Pacific)
Ltd Chief Investment Officer Stephen Corry.

He said a move otherwise could possibly create asset bubbles.

China registered a gross domestic product growth of 10.7 per cent in the
fourth quarter of 2009, bringing the year's economic growth to 8.7 per cent
overall last year.

"To create an effective tightening, it has to let its currency to move
higher," he told Bernama in an interview here Tuesday.

That, however, would be a political decision rather than economic, he added.

Beijing has pegged the yuan's value at roughly 6.8 per US dollar.

"Tightening its monetary policy will actually help it sustain growth
compared with a boom-bust cycle that everyone fears,” said Corry.

Merrill Lynch provides capital markets services, investment banking and
advisory services, wealth management, asset management, insurance, banking and
related financial services worldwide. Merrill Lynch is headquartered in New York
City.


-- BERNAMA