Premier Wen calls for 'relatively fast growth'
Source: Agencies |
May 21, 2012, Monday
|
Print Edition
Print Edition
Premier Wen Jiabao called for more priority to be given to ensure "relatively fast" economic growth, after unusually weak industrial activity in April prompted alarm about the world's second-largest economy.
During a weekend trip to Wuhan in central China's Hubei Province, Wen promised to boost domestic consumption and strengthen and improve macro control efforts.
"We should continue to implement a proactive fiscal policy and a prudent monetary policy, while giving more priority to maintaining growth," Wen said. He gave no details of possible new initiatives.
The government spent the past two years trying to cool inflation and steer rapid economic growth to a more sustainable level. But a plunge in global demand prompted Chinese leaders to start reversing course late last year. Unexpectedly weak industrial activity in April prompted some analysts to say they need to move faster.
Factory output in April fell to the lowest level since the 2008 global financial crisis and consumer spending and home sales were weaker than forecast. That jarred hopes China can achieve a "soft landing," with growth rebounding next year.
Economic growth fell to a nearly three-year low of 8.1 percent over a year earlier in the first quarter and may fall further. The World Bank and International Monetary Fund are forecasting growth this year of 8.2 percent.
Private sector analysts say China may move more cautiously in response to this slowdown than it did after the 2008 crisis. Then, a huge stimulus program helped China rebound quickly but fueled inflation and a wasteful building boom.
Government plans call for boosting domestic consumption to reduce reliance on exports and investment to drive growth. Chinese consumer spending is rising but has failed to fill the gap due to weak global demand for exports.
Lending and purchase curbs imposed to cool surging housing costs have caused a slump in real estate, a key driver of China's growth, but the government has kept them in place, saying prices still are too high.
During the trip, Wen affirmed that message, calling on local authorities to enforce measures meant to cool housing costs and increase supplies of affordable housing for low-income families.
During a weekend trip to Wuhan in central China's Hubei Province, Wen promised to boost domestic consumption and strengthen and improve macro control efforts.
"We should continue to implement a proactive fiscal policy and a prudent monetary policy, while giving more priority to maintaining growth," Wen said. He gave no details of possible new initiatives.
The government spent the past two years trying to cool inflation and steer rapid economic growth to a more sustainable level. But a plunge in global demand prompted Chinese leaders to start reversing course late last year. Unexpectedly weak industrial activity in April prompted some analysts to say they need to move faster.
Factory output in April fell to the lowest level since the 2008 global financial crisis and consumer spending and home sales were weaker than forecast. That jarred hopes China can achieve a "soft landing," with growth rebounding next year.
Economic growth fell to a nearly three-year low of 8.1 percent over a year earlier in the first quarter and may fall further. The World Bank and International Monetary Fund are forecasting growth this year of 8.2 percent.
Private sector analysts say China may move more cautiously in response to this slowdown than it did after the 2008 crisis. Then, a huge stimulus program helped China rebound quickly but fueled inflation and a wasteful building boom.
Government plans call for boosting domestic consumption to reduce reliance on exports and investment to drive growth. Chinese consumer spending is rising but has failed to fill the gap due to weak global demand for exports.
Lending and purchase curbs imposed to cool surging housing costs have caused a slump in real estate, a key driver of China's growth, but the government has kept them in place, saying prices still are too high.
During the trip, Wen affirmed that message, calling on local authorities to enforce measures meant to cool housing costs and increase supplies of affordable housing for low-income families.
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