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Downturn won't alter growth target

THE central government is confident China will meet its 8 percent economic growth target this year, despite the massive "downward pressure" from the global financial crisis, a top planning agency official said yesterday.

"I think we have the conditions, the possibility and the confidence to achieve that goal," Liu Tienan, vice minister of the National Development and Reform Commission, said yesterday.

In the effort to help the national economy ride out the global slump, the government recently rolled out 10 support packages targeting specific industries on top of a broad 4 trillion yuan (US$585 billion) fiscal stimulus plan announced in November that features heavy spending on infrastructure projects such as railways and power grids.

The individual packages cover a wide range of boosting measures, from tax breaks to plans for industry consolidations.

China's overall financial system is healthy, the economic fundamentals are unchanged, and there is huge demand potential amid growing urbanization and industrialization, Liu told a media briefing in Beijing.

Liu said the domestic economy had shown at least a few signs of recovery recently, but a comprehensive judgment on the health of the economy must await for the release of first-quarter data.

China's economy, a rare pocket of growth among major countries, expanded 9 percent last year after rising a blistering 13 percent in 2007. In the fourth quarter last year, it grew just 6.8 percent, with falling exports leading the slowdown.

Liu's optimism is not necessarily shared by other experts.

Ratings agency Standard & Poor's forecast this week that China could experience further economic weakness in early 2009, but a rebound within the year could bring the annual growth rate to 6.5 percent, still below the official target.

"We believe China is likely to weather the downturn better than most others, in large part through its ambitious stimulus plans," said Kim Eng Tan, an S&P credit analyst.

The NDRC said the 10 industry-specific support packages, which cover autos, steel, shipbuilding, textiles, light industry, machinery manufacturing, petrochemicals, electronics, nonferrous metals and logistics, will run through 2011.

The government will adjust the directives to match any changes in economic conditions and also provide support measures to other industries that are not included in the 10 initial plans, such as property and energy, Liu said.

Under the sector plans, the government will boost the rebates of value-added taxes on the exports of certain steel, nonferrous, textile and petrochemical products and consumer goods to stimulate sales.

The plans also provide funds for technology upgrades, among other support measures.

Meanwhile, China's policy to strictly control exports for goods that are pollution-prone and resource and energy-intensive is unchanged, said Chen Bin, director general of the NDRC's Department of Industry.


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