China on Tuesday reaffirmed that it will maintain "reasonable growth" in credit and money supply, and stick with proactive fiscal policies to expand domestic demand. China would also curb speculative property investment and take steps to deal with inflationary expectations, Premier Wen Jiabao told a meeting of the State Council, or cabinet, according to a statement posted on the government's website, www.gov.cn.

"China will maintain reasonable growth in money supply and credit, focus on optimising the credit structure and carefully manage the pace of lending to reduce financial risks," Wen said. China's central bank has stepped up efforts to rid the financial system of excess cash by lifting auction yields on one-year bills and last week raised bank reserve requirements for the first time since June 2008. Loan growth surged 600 billion yuan ($87.9 billion) in the first week of January, and some economists believe Chinese banks have already lent 1 trillion yuan.

Copyright Reuters, 2010