CHINA

Head of Central Bank Ousted: China has issued sweeping measures to cut spending and inflation, a pro-Beijing Hong Kong newspaper reported over the weekend, following the sacking of its central bank chief for mismanagement. The measures are the most serious attempt to cool the overheated economy since a 1988 austerity drive that helped spark the 1989 democracy movement. The newspaper quoted “authoritative sources” as saying the government would curb public works projects, cut its own administrative spending by 20%, put price reforms on hold and order banks to recover loans. The Communist Party’s decision-making Central Committee expects the measures will slow economic growth from an annualized rate of 14% in the year’s first five months to “around 10%,” the newspaper reported. The 16-point austerity program shows that Beijing is determined to tackle a multitude of side effects resulting from a year of record economic growth. On Friday, the government officially confirmed that it had dismissed central bank governor Li Guixian and replaced him with Vice Premier Zhu Rongji.