Below are comments from leading advisers and former officials. They do not have direct influence over economic policy, which is set by the senior government leadership, but their recommendations are sometimes adopted. LI DAOKUI, ACADEMIC ADVISER TO THE PEOPLE'S BANK OF CHINA Li sits on the central bank's monetary policy committee to provide advice on interest and exchange rate policy. Li expects that China's economy will grow by 8.5 percent in 2012, and that consumer inflation will moderate to about 3 percent, eased by falls in food prices. He said the biggest risk to the Chinese economy lies in the real estate market, and expects both transaction volumes and property prices to drop this year. Source: China Securities Journal, February 18. LI YANG, FORMER ACADEMIC ADVISER TO THE PEOPLE'S BANK OF CHINA Li is now a vice chairman of the Chinese Academy of Social Sciences, a top government think tank. "The chance is small of seeing a large appreciation in the yuan in the future, because the offshore yuan market has shown signs of yuan depreciation and China's trade surplus as a share of GDP may continue to shrink. "In addition, China's consumer price index is expected to stay higher than that in the United States for a long time, which means there is little need for the yuan to pursue a quick appreciation. "I think China will realise a market-based interest rate system in about three to five years." Source: China Securities Journal, February 13. TANG MIN, STATE COUNSELOR Tang is a former China chief economist of the Asian Development Bank and now advises the Chinese government on economic policy. "The situation of excessive liquidity has not changed completely yet, and there are still many factors to drive up inflation in the medium to long term, so monetary policy must be kept relatively tight. "China can be flexible and use cuts in banks' required reserves and open market operations, but overall, there should not be too big of a change." Source: People's Daily article, February 10. WU XIAOLING, FORMER DEPUTY CENTRAL BANK GOVERNOR Wu is a senior lawmaker as deputy governor of the National People's Congress' economic committee. "People are talking about tight credit and many firms feel cash strained. Is China really short of money? No." "The best way to solve this problem is to lower the threshold for companies to enter the credit markReuters "For this year in particular, a measure to widen the gap for banks to lower lending rates compared with official benchmarks can also be considered." Source: at a forum in Yabuli, northern China's Heilongjiang province, February 6. MA JIANTANG, HEAD OF THE NATIONAL BUREAU OF STATISTICS "Although we have achieved some positive results in calming prices, the upward pressure still exists in the mid- and long-term. The rising domestic cost of production is hard to change in the short run, imported inflationary pressure is still high. "The foundation of stable consumer prices is not solid yet and inflation could still possibly rebound." Source: Qui Shi magazine, Jan 16. LI DESHUI, ADVISER TO THE CHINESE GOVERNMENT AND FORMER HEAD OF THE NATIONAL BUREAU OF STATISTICS "Western economists have predicted many times in recent decades that the Chinese economy would crash, but history has proved that they were always wrong. This is mainly because they don't understand China. "China has a financial security valve, which is that the Chinese yuan is not fully convertible under the capital account. There are no conditions for foreign capital to enter or quit the China market on a massive scale." Source: National Bureau of Statistics website, Jan 9 WU XIAOLING, FORMER DEPUTY CENTRAL BANK GOVERNOR "I think next year, the central bank may use the tool of reserve requirement ratio (RRR) more often. "If foreign exchange purchase positions increase less rapidly or even drop next year, the central bank will have to release some liquidity by cutting the RRR, and this does not mean a reversal in monetary policy stance." Source: at a forum in Beijing, Dec 25 2011 XIA BIN, ACADEMIC ADVISER TO THE PEOPLE'S BANK OF CHINA Xia sits on the central bank's monetary policy committee to provide advice on interest and exchange rate policy. "I always believe that we must implement a 'prudent' monetary policy next year. This means we maintain appropriate money supply to ensure economic growth of 8-9 percent, rather than pursuing the rapid expansion seen in 1999 and 2000." Source: at a Beijing business forum, Dec 19 2011 LI DAOKUI, ACADEMIC ADVISER TO THE PEOPLE'S BANK OF CHINA Li sits on the central bank's monetary policy committee to provide advice on interest and exchange rate policy. "I believe conditions for accelerating interest rate reforms are favourable banks' profits are hefty and banks are able and willing to take on the test of the market." Source: Comments to reporters on the sidelines of a Beijing business forum, Dec 19 2011 XIA BIN, ACADEMIC ADVISER TO THE PEOPLE'S BANK OF CHINA "I believe we need policy fine-tuning under the premise of keeping monetary policy 'prudent'. But fine-tuning does not mean simply relaxing monetary conditions and does not mean a relaxation of overall (credit)." "I expect the pressure on prices to stay relatively large in 2012. It's ideal for China to have 2-3 percent mild inflation during the process of economic restructuring." Source: China Securities Journal, Dec 16 2011.