UPDATE 1-China says fast growth is contribution to world

(adds details, background, byline)

By Simon Rabinovitch

BEIJING, Oct 4 (Reuters) - Maintaining "quite fast" growth is the biggest contribution China can make to help the world economy overcome the credit crisis, the country's central bank said on Saturday.

Welcoming the passage of the $700 billion bank bailout plan in the United States, the People's Bank of China said it was "fully confident" that China could sustain economic growth and financial stability.

The central bank, in a statement on its website, said it would increasingly call on macroeconomic policy to support sound and stable growth.

To minimise the impact of the U.S. financial crisis, the central bank said China would strengthen its "prudent supervision" of banks, while also asking them to enhance their own risk management.

"We are completely confident that we have the conditions and the ability to maintain China's economic development and financial stability, and to make a contribution to the stable development of the world economy," the central bank said.

China grew 10.1 percent in the second quarter from a year earlier, making it one of the rare bright spots in the world economy, but even that pace was well down from its blistering 11.9 percent expansion in 2007.

The central bank cut China's benchmark lending rates last month for the first time in six years.

Many economists saw the cut as a turning point in the country's monetary policy, with Beijing shifting its focus to supporting growth from battling inflation.

There was no mention of inflation in the statement on the central bank's website on Saturday. Consumer inflation fell to 4.9 percent in the year to August from a 12-year peak of 8.7 percent in February.

What regulatory lessons China can draw from the financial meltdown in the United States has become a hot topic in Beijing.

With capital flows between China and the world still heavily controlled, Chinese banks have had relatively little direct exposure to the turbulence rocking the world economy. Some have said that this may reinforce China's cautious, incremental approach to financial reform and innovation. (Editing by Lincoln Feast)