China focusing on inflation, overheating - Zhou

WASHINGTON, April 13 (Reuters) - China's main monetary policy tasks remain fighting inflation and economic overheating but continuous restructuring has made the Chinese economy able to weather the global slowdown, central bank governor Zhou Xiaochuan was quoted as saying on Sunday.

The People's Bank of China chief was quoted by the Hong Kong-based Phoenix TV as saying he was confident China's 2008 economic growth would exceed the 9.3 percent predicted by the International Monetary Fund in its annual outlook.

Economic and financial reforms had given China a healthier foundation to face global economic uncertainty and China had so far avoided any significant fallout from the U.S. credit crunch, Zhou was quoted as saying.

The two core tasks of Chinese policy-makers were preventing inflation and economic overheating with a tight monetary policy, he told the network.

Phoenix said Zhou declined to address a question about his expectations for the rate of appreciation of the Chinese yuan.

But he said the weakening U.S. dollar and strengthening euro meant that the Chinese exchange rate would be benchmarked against a basket of currencies and not the dollar alone and that markets would increasingly be used to set the exchange rate.

On Saturday, Zhou told the spring meetings of the IMF and Group of Seven economies that exchange rates had limited utility in addressing large global imbalances and exaggerating their importance was unrealistic.

The United States and the European Union have been pressing China to let its currency climb in order to cut a huge Chinese trade surplus with major trade partners.

China's currency issue, a centerpiece of previous G7 meetings, was not in the spotlight at this year's gathering, although the IMF said exchange rate flexibility was a useful took for addressing inflation in countries such as China. (Reporting by Paul Eckert; Editing by Andrea Ricci)