(Adds remarks on rates, taxes, real estate, and background)
SHANGHAI, Jan 7 (Reuters) - China's central bank still has room to take many monetary policy steps to support the economy, if the economic situation makes them necessary, an adviser to the central bank said on Wednesday.
"I believe decision-makers are ready to take big steps when necessary to prevent the economy from deteriorating rapidly," Fan Gang, who holds the academic seat on the central bank's monetary policy committee, said in a speech to a financial forum.
However, Fan added that China's benchmark interest rates should already be considered low, and that official cuts in Chinese benchmark rates tended to have a bigger impact on market rates than equivalent cuts in the United States had on U.S. market rates.
China has cut interest rates five times since mid-September, most recently on Dec. 22, to fend off a deepening economic slowdown. It cut the benchmark one-year lending rate to 5.31 percent and the one-year deposit rate to 2.25 percent.
Fan also said that in addition to monetary policy steps and fiscal spending, China needed to aid its economy with tax reforms. Consumer spending has been restrained by the fact that big state firms have been taking a large share of national income in the form of profits, leaving less money for consumers, he said.
He said China's economy was expected to achieve the government's minimum growth target of 8 percent this year, helped by fiscal stimulus measures.
The Chinese real estate market has enjoyed somewhat stronger demand in the past two months, an earlier-than-expected recovery, but real estate developers will remain very cautious about launching new projects this year, he added.
The U.S. economy is set to suffer negative annual growth of 1 or 2 percent in the next two years, followed by low growth rates between zero and 1 percent for the following two years, he said. (Reporting by Samuel Shen; Writing by Andrew Torchia, Editing by Jacqueline Wong)