BEIJING - THE fundamentals of China's economy remain good despite the global financial crisis, with the government confident of maintaining fast growth, a senior official said on Friday.

'I think the central government's decision to make significant changes to economic policy ... showed its firm determination and confidence in stabilising the economy and maintaining fast growth', National Development and Reform Commission vice chairman Mu Hong told reporters.

'The origin of the financial crisis is outside the country and its impact on our financial system is limited. The fundamentals of our economy are still good'.

Speaking at the same briefing on the financial crisis and China's response, central bank vice governor Yi Gang said the nation's banking system had plenty of money, indicating no concerns about a US-style credit crunch.

'The liquidity in China's financial market is generally abundant', Mr Yi said.

'Before the US financial crisis, we had excess liquidity. At present, our liquidity is abundant'.

Nevertheless, Mr Mu cautioned that China was facing problems and the crisis should not be underestimated.

China announced over the weekend a spending package worth four trillion yuan (S$891 billion) aimed at lifting economic growth, which slipped to 9.0 per cent in the third quarter, its slowest pace in five years.

China says it will hold on to US assets
China's central bank vice governor also told reporters on Friday that China will not panic and sell off its US assets in the face of the global financial crisis.

'China inevitably has to invest its forex reserves in the overseas market and we are very responsible about our forex investment', Mr Yi told reporters when asked about investing in US financial assets.

'We will deal with the current financial tsunami in a responsible and steady manner... this responsible and steady attitude, instead of the attitude of selling off in a panic, will benefit the overall financial market'. -- AFP