Due to grim international economic conditions, China's export growth has slowed down, increasing the odds of further domestic economic slowdown. Furthermore, many contributing factors to inflation still exist. These intertwined issues pose a difficult dilemma for China's macro-economic regulation in 2012.

As far as the dilemma is concerned, the People's Daily interviewed Zhou Xiaochuan, governor of the People's Bank of China, China’s central bank.

Reporter: China has made some adjustments to its macro-economic policies in 2011 to cope with the changing economic situation through frequent macro-control actions during the early period of last year and fine-tuning afterward. In addition, the Central Economic Work Conference called for "steady improvements." What do you think about the economy for 2012 and China's policy choices?

Zhou Xiaochuan: Overall, the world economy will face many difficulties and uncertainties in 2012. China should be wary and prepare for a difficult year.

Internationally, issues such as the development of the European debt crisis, uncertainty of the U.S. economic recovery and the slowdown of the emerging market economies all exist. If all these issues get worse, China's external environmental will be unfavorable. More importantly, the international economy is constantly changing and currently it is hard to predict its development trend. Therefore, China should make some preparations for possible situations.

Nationally, affected by the international economic situation, China's export has slowed down a little bit and the pressure of the slowdown of the economic growth has increased obviously. Meanwhile, there are still many factors that affect commodity prices, and especially, costs of the land, labor force and environmental protection will affect commodity prices for a long period.

In 2012, local governments will shift, various places' enthusiasms of promoting the urbanization industrialization will be very high, and China will still not be able to let down its guard against the inflation. These issues will make China's macroeconomic control face many dilemmas.