Related News
China to maintain money controls, invest in EU: Wen
By Lydia Chen |
September 14, 2011, Wednesday
|
Online Edition
Online Edition
CHINA will maintain its "active and prudent" fiscal and monetary policies to curb inflation while forging ahead with structural reforms and boosting domestic consumption to sustain long-term economic growth, Premier Wen Jiabao told a forum today.
The country "will keep overall price levels basically stable and prevent big swings in economic growth," Wen said in a keynote speech at the opening of the World Economic Forum in the city of Dalian this morning.
He also urged governments around the world to "fulfill their responsibilities and put their own house in order" in the face of a financial crisis.
China's economy grew at a slower pace of 9.5 percent in the second quarter, which was largely a result of the government's tightening policies and was all within expectations, Wen said.
The world's second largest economy, which maintained an annual growth rate of 10.5 percent over the past decade, was "turning to a direction" the government expected it to be – GDP slowed to 9.6 percent in the first half of the year while domestic consumption started playing a bigger role with the trade surplus shedding 17.6 percent during the same period, he noted.
"China is fully able and we have conditions and confidence in maintaining relatively fast economic growth," he said, adding that the government needed to keep a balance between stable growth, structural reforms and confining inflation.
At the beginning of the year, China laid out its forecast for annual economic growth at 8 percent this year, down from last year's 10.3 percent. Inflation is expected to be controlled within 4 percent, compared with last year's 3.3 percent.
But the 4 percent yearly inflation target now seems almost unrealistic given the fact that the consumer price index, a main gauge for inflation, shot to 5.4 percent during the first six months and is expected to hover around this level for the rest of this year.
This leaves China with little room to ease its monetary and fiscal tightening. But many economists also believe China may hold off more monetary tightening to avoid further damage to the local economy as the global economy slows down.
Wen also touched upon the sovereign debt crisis and high unemployment rates in the West in his speech to hundreds of company CEOs and world leaders at the annual 3-day event, known as "Summer Davos."
The world economic recovery will be a "long-term, difficult and complicated process," given the sovereign debt levels in some countries, high unemployment in major advanced economies and upward inflationary pressure in emerging economies, he said.
"Countries must first put their houses in order," Wen said. "Developed countries must take responsible fiscal and monetary policies and what is most important now is to prevent the further spread of the sovereign debt crisis in Europe," he added.
Wen said China has noticed that the European economies were going through hard patches and China had reiterated that it was still willing and ready to "offer a helping hand" by stepping up investments in Europe, Wen said.
But leaders in major European economies also needed to make a strategic change in their Sino-Euro relationships by admitting China's full market economy status, Wen said.
Wen said China believed European leaders should recognize its full market economy status before the 2016 deadline set by the World Trade Organization.
"To show one's sincerity on this issue a few years ahead of that deadline is the way a friend treats another friend," Wen said.
When China joined the WTO in 2001, it agreed to be treated as a non-market economy until 2016. A market economy status can help Chinese firms defend themselves in anti-dumping probes in Europe.
Meanwhile, Wen also expressed confidence in the US economy but called on the world's No. 1 economy to maintain fiscal and financial stability to make sure global investors' interests were protected.
China is now the United States' biggest foreign creditor - holding an estimated US$1.6 trillion in American government debt. Most of its US$3.2 trillion of foreign exchange reserves, the world's largest, is also in US dollar.
The country "will keep overall price levels basically stable and prevent big swings in economic growth," Wen said in a keynote speech at the opening of the World Economic Forum in the city of Dalian this morning.
He also urged governments around the world to "fulfill their responsibilities and put their own house in order" in the face of a financial crisis.
China's economy grew at a slower pace of 9.5 percent in the second quarter, which was largely a result of the government's tightening policies and was all within expectations, Wen said.
The world's second largest economy, which maintained an annual growth rate of 10.5 percent over the past decade, was "turning to a direction" the government expected it to be – GDP slowed to 9.6 percent in the first half of the year while domestic consumption started playing a bigger role with the trade surplus shedding 17.6 percent during the same period, he noted.
"China is fully able and we have conditions and confidence in maintaining relatively fast economic growth," he said, adding that the government needed to keep a balance between stable growth, structural reforms and confining inflation.
At the beginning of the year, China laid out its forecast for annual economic growth at 8 percent this year, down from last year's 10.3 percent. Inflation is expected to be controlled within 4 percent, compared with last year's 3.3 percent.
But the 4 percent yearly inflation target now seems almost unrealistic given the fact that the consumer price index, a main gauge for inflation, shot to 5.4 percent during the first six months and is expected to hover around this level for the rest of this year.
This leaves China with little room to ease its monetary and fiscal tightening. But many economists also believe China may hold off more monetary tightening to avoid further damage to the local economy as the global economy slows down.
Wen also touched upon the sovereign debt crisis and high unemployment rates in the West in his speech to hundreds of company CEOs and world leaders at the annual 3-day event, known as "Summer Davos."
The world economic recovery will be a "long-term, difficult and complicated process," given the sovereign debt levels in some countries, high unemployment in major advanced economies and upward inflationary pressure in emerging economies, he said.
"Countries must first put their houses in order," Wen said. "Developed countries must take responsible fiscal and monetary policies and what is most important now is to prevent the further spread of the sovereign debt crisis in Europe," he added.
Wen said China has noticed that the European economies were going through hard patches and China had reiterated that it was still willing and ready to "offer a helping hand" by stepping up investments in Europe, Wen said.
But leaders in major European economies also needed to make a strategic change in their Sino-Euro relationships by admitting China's full market economy status, Wen said.
Wen said China believed European leaders should recognize its full market economy status before the 2016 deadline set by the World Trade Organization.
"To show one's sincerity on this issue a few years ahead of that deadline is the way a friend treats another friend," Wen said.
When China joined the WTO in 2001, it agreed to be treated as a non-market economy until 2016. A market economy status can help Chinese firms defend themselves in anti-dumping probes in Europe.
Meanwhile, Wen also expressed confidence in the US economy but called on the world's No. 1 economy to maintain fiscal and financial stability to make sure global investors' interests were protected.
China is now the United States' biggest foreign creditor - holding an estimated US$1.6 trillion in American government debt. Most of its US$3.2 trillion of foreign exchange reserves, the world's largest, is also in US dollar.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
