China can best help world by growing fast: Wen
Sunday, 28 September 2008
TIANJIN, Sept 27 (Reuters): Premier Wen Jiabao expressed confidence Saturday that China could maintain fast growth and said this was the greatest contribution it could make to help the world weather the current financial crisis.
Markets are uneasy that the economy is slowing sharply under the impact of drooping demand for China's exports and tight credit conditions that have taken a toll on the property sector, which accounts for nearly a quarter of fixed-asset investment.
But Wen, addressing a World Economic Forum (WEF) meeting in the northern Chinese port city of Tianjin, struck an optimistic note.
"We have full confidence and the ability to overcome all sorts of difficulties in order to keep our economy growing in a sound and fast manner for a longer time to come," he said.
Wen said China would follow flexible, prudent policies to tackle the fallout of the still-unfolding crisis, widely billed as the most serious since the Great Depression.
"What we can do now is to maintain China's strong, stable and relatively fast growth and avoid big fluctuations. That is the biggest contribution we can make to the world economy under the current circumstances," he said.
China grew a blistering 11.9 per cent in 2007, its fifth straight year of double-digit growth, prompting the central bank to tighten monetary policy late last year to curb inflation.
The policy has largely worked. Consumer inflation has fallen to 4.9 per cent in the year to August from a 12-year peak of 8.7 per cent in February, while gross domestic product growth slowed to 10.1 per cent in the second quarter from a year earlier.
Fearing growth could slow too much as the global credit crunch intensifies, the People's Bank of China surprisingly cut bank lending rates last week for the first time since 2002.
"Overall, our economy's basic fundamentals haven't changed and it's developing in line with our economic policies," Wen said.
But he said inflation remained relatively high and the challenge for policy makers was to strike the right balance between promoting growth, creating jobs and keeping a lid on price pressures.
Other challenges included ensuring ample energy supplies to support China's fast economic growth.
China must speed up reform of the pricing of natural resources, Wen said without going into detail.
China also had to watch out for potential risks in its financial system, the premier added, renewing long-standing commitments to making the yuan fully convertible and developing the country's capital markets.
Wen also pledged to beef up the rule of law, fight corruption and do more to reduce social inequalities by, among other things, spending more on health and education.
Markets are uneasy that the economy is slowing sharply under the impact of drooping demand for China's exports and tight credit conditions that have taken a toll on the property sector, which accounts for nearly a quarter of fixed-asset investment.
But Wen, addressing a World Economic Forum (WEF) meeting in the northern Chinese port city of Tianjin, struck an optimistic note.
"We have full confidence and the ability to overcome all sorts of difficulties in order to keep our economy growing in a sound and fast manner for a longer time to come," he said.
Wen said China would follow flexible, prudent policies to tackle the fallout of the still-unfolding crisis, widely billed as the most serious since the Great Depression.
"What we can do now is to maintain China's strong, stable and relatively fast growth and avoid big fluctuations. That is the biggest contribution we can make to the world economy under the current circumstances," he said.
China grew a blistering 11.9 per cent in 2007, its fifth straight year of double-digit growth, prompting the central bank to tighten monetary policy late last year to curb inflation.
The policy has largely worked. Consumer inflation has fallen to 4.9 per cent in the year to August from a 12-year peak of 8.7 per cent in February, while gross domestic product growth slowed to 10.1 per cent in the second quarter from a year earlier.
Fearing growth could slow too much as the global credit crunch intensifies, the People's Bank of China surprisingly cut bank lending rates last week for the first time since 2002.
"Overall, our economy's basic fundamentals haven't changed and it's developing in line with our economic policies," Wen said.
But he said inflation remained relatively high and the challenge for policy makers was to strike the right balance between promoting growth, creating jobs and keeping a lid on price pressures.
Other challenges included ensuring ample energy supplies to support China's fast economic growth.
China must speed up reform of the pricing of natural resources, Wen said without going into detail.
China also had to watch out for potential risks in its financial system, the premier added, renewing long-standing commitments to making the yuan fully convertible and developing the country's capital markets.
Wen also pledged to beef up the rule of law, fight corruption and do more to reduce social inequalities by, among other things, spending more on health and education.