WORLD> China
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WORLD> China
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Premier Wen warns of uncertainties despite recovery
(Xinhua)
Updated: 2009-08-24 20:58 HANGZHOU: Chinese Premier Wen Jiabao has warned uncertainties ahead despite signs of economic recovery both at home and abroad, reiterating the government's steadfast commitment to its current economic policies.
Wen was speaking after US Federal Reserve Chairman Ben Bernanke declared Friday that the US economic recovery had started, which boosted investor confidence around the world and pushed up equities and crude prices. "There are still a lot of unstable and uncertain factors ahead and the economic situation is still very grave, although both the world economy and the national economy are making positive changes," Wen said during an inspection tour of east China's Zhejiang Province from Saturday to Monday. Wen said the country's economic performance showed increasingly positive signs, but stressed recovery was still "unstable", not consolidated and "unbalanced". He warned against blind optimism.
Wen echoed Hu's comments on July 27 to say that the country should stick to its proactive fiscal policy and moderately easy monetary policy for a sustained growth during a visit to northeast China's Jilin Province. In elaboration over the weekend, Wen said great uncertainties persisted, and export demand was still down, and could remain that way for a long time. "The country's economic development still lacks inner vitality to counter the crisis, as policy support remains an important propellant of economic growth," he said. Weakening external demand was also creating overcapacity in some sectors, which would be a big obstacle to a rebound in industrial and economic growth, said Wen. "It is also difficult to significantly expand domestic demand in a short period," he said. "Some short-term policies could be less effective over time while it takes some time before medium and long-term policies can take effect. "Therefore, it remains our top priority to maintain the macro economic policies for stable and relatively fast growth," Wen said. "We cannot afford any slackening and hesitation in doing so." LONG-TERM GOALS Wen said the government had been able to reverse the decline in growth quickly with timely and decisive stimulus measures, and the national economy was rebounding, especially since the second quarter, with market expectations improved and investor confidence boosted. "These are hard-earned results," said Wen. The world's third largest economy reported growth of 7.9 percent in the second quarter, which pushed the first-half growth rate to 7.1 percent, after massive pump-priming and record lending pushed a rebound from the worst growth in a decade. China's stimulus measures included a 4-trillion-yuan (US$585-billion) package to be spent by the end of 2010, announced in November last year. Wen emphasized that the stimulus measures were also targeting long-term goals, such as the restructuring of the economy. The stimulus plans were also aimed at expanding domestic demand, so as to drive the economy towards more balanced and sustained development, to promote industrial restructuring, boost technological innovation, and significantly improve social security coverage. "At the core of the package of stimulus plans is a solution to structural problems in the Chinese economy, an acceleration of the transition in the growth mode, and promotion of the economic growth while improving the quality of the economic development," he said. |
