Stimulus steps prove effective

The government's prompt moves to stimulate the economy have taken effect and appear to have arrested the drastic economic slowdown, the central bank governor said yesterday.

"The macroeconomic measures have produced preliminary results and some leading indicators are pointing to a recovery of economic growth," Zhou Xiaochuan said in an article posted on the People's Bank of China website.

Economic growth dropped to a seven-year low of 6.8 percent in the fourth quarter of 2008, as overseas demand dwindled and investment weakened. The central bank quickly reacted, with five interest rate cuts since last September and much lower requirements of banking reserves to ensure liquidity and boost loan growth.