The official Shanghai Securities News said in a front-page article that the nation would implement an "appropriately loose" monetary stance in 1999.

A spokesman for the People's Bank of China, the central bank, described the report as "not very accurate" but added adjustments to the nation's money policy were on the cards.

"We will maintain an appropriately tight monetary policy but with timely adjustments," he said in Beijing.

The phrasing marks a change from the traditional catchword of an "appropriately tight" monetary policy, and analysts said the government remained concerned about an economic slowdown.

Beijing has targeted economic growth of 8.0 per cent this year, but gross domestic product (GDP) rose just 7.2 per cent year-on-year in the first nine months due to slack consumption and slowing exports amid the Asian financialcrisis.

"The easy monetary policy will be important in ensuring there will be demand and consumption growth," said Hoong Yik Luen, head of China research for ING Barings.

China has embarked on a massive programme of infrastructure development to push economic growth closer to its target.

It is speeding up spending on an array of projects from roads and railways to ports and power grids.

China's broad measure of money supply, M2, is already showing the effects, rising 16 per cent year-on-year at the end of September. It was up 14 per cent year-on-year at the end of June.

Official forecasts call for M2 To rise 16 to 18 per cent for the full year.

The central bank has already cut local currency interest rates twice this year and slashed bank reserve ratios.

On Monday, China trimmed rates on dollar deposits and loans, in a move which could pave the way for a further cut in interest on bank rates for the local yuan currency, bankers said.

China had cut interest on dollar loans and deposits onSeptember 23 but since then the US Federal Reserve twice lowered the rate on fed funds, or excess reserve funds traded among banks, for a total reduction of 0.5 percentage point.

"If the Fed continues to ease the dollar rate from now on it will give China some room to ease the yuan rate," ING Barings' Hoong said.

China's policy-makers are loath to proclaim an end to tight monetary policies, fearing this could encourage local governments to go on a spending spree.

The Shanghai Securities News said that although the central bank had avoided saying so, its monetary policy this year had already been "appropriately loose".

"The recent meeting of the monetary policy of the People's Bank of China recommended that next year's monetary policy take this year's policy as its base, maintaining continuity and stability," the newspaper said.

But there would be an appropriate increase in money supply to stimulate economic development, it said.

"From this we gain a clear signal that next year's policy will beappropriately loose," the newspaper said.

Whatever the description, the policy will not be determined by the central bank alone, bankers said.

While China has tried to expand the powers of the central bank and create an institution along the lines of the US Federal Reserve, senior government and Communist Party leaders still have a role in setting monetary policy.