(Reuters) - China should be particularly cautious in introducing new tightening measures, as the global and domestic economies still face uncertainties, a state planning official said on Monday.
Xu Lianzhong, an official from the National Development and Reform Commission (NDRC), the top economic planning organization, said a quick and early exit from loose policies would not be the best choice now because of risks from the spreading European debt crisis.
Xu, who heads the price monitoring center at the NDRC, said China, the world's third-largest economy, faced weak private sector investment and uncertainties in domestic consumption and exports.
"The drastic changes in economic policies will have a negative impact on the sustainable performance of the economy," Xu said in an article published in the official China Securities Journal.
"The market is quite sensitive about policy adjustments, especially when the European debt crisis is spreading," he said.
The recent measures to rein in the red-hot property market will ease investments in the sector, Xu said, suggesting that authorities would have to consider the side-effects on economic growth for any further property tightening moves.
China has introduced a slew of measures in the property sector, such as higher down payments and mortgage rates, as well as stricter lending to developers, to control speculative buying.
He also said that inflation was still relatively mild and was not a major risk to the economy.
Chinese consumer price inflation hit an 18-month high of 2.8 percent in April. The NDRC said earlier this month that inflation would average about an annual 2.5 percent in the first half of this year, which is relatively tame compared with previous years.
