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Premier says economy shows positive signs of a recovery

PREMIER Wen Jiabao says China's economy is showing "positive changes" but has called for more efforts to fight the global financial crisis.

The economy showed "better than expected positive changes in the first quarter" due to the government's huge stimulus plan, Wen said in Pattaya on Saturday before leaving for Beijing after protesters forced the Thai government to cancel the planned Association of Southeast Asian Nations summit.

Citing improved investment, consumption and trade figures, Wen said some sectors of the economy were "in a process of gradual recovery."

But he called for continued vigilance. "As the crisis has not touched its bottom, we can hardly say that the Chinese economy alone has got out of the crisis," he said.

"China cannot save the world, nor can it survive without the world. What we should do is to exert our utmost efforts to minimize the effect of the crisis."

Investment in fixed assets had increased rapidly and consumer demand had grown steadily and "relatively rapidly" in the first three months of the year, he said.

Although lower than in the same period last year, imports and exports had also grown month by month, Wen said.

He said industries with annual sales of more than 5 million yuan (US$731,000) had registered month-on-month growth, with a year-on-year increase of 3.8 percent in both January and February, and a year-on-year increase of 8.3 percent in March.

Also, the purchase management index and the entrepreneur confidence index of manufacturing industry both rose, indicating that the Chinese economy had begun to stabilize and recover in some fields, Wen said.

Serious hardships

He said the economy had become more active over the first three months, with increases in both the stock market and housing market transaction volumes.

Positive performances in economic fields suggested the policies adopted by the central government had been timely and correct and had led to successes, he said.

But China's economy was still facing serious hardships, which could be attributed to the shrinking of external demand and a relatively sharp fall in exports. This had had a negative impact on export enterprises, export-oriented industries and export-oriented zones, and had resulted in decreases in profits and revenue and heavier pressure on employment, he said.

Asked if China would introduce additional economic stimulus plans, Wen said the government should now step up efforts to carry out the policies and measures of the existing stimulus package. The earlier they are put into effect, the more beneficial and active they will be, he said.

First, it was imperative to release the additional investment for stimulating the economy that is included in the budget. Second, specific rules for reforming and reviving China's 10 key industries should be formulated as soon as possible. And third, there should be efforts to speed up the development of the social security system, Wen said.

It was also essential to closely follow the changing economic situation at home and abroad and hammer out new responses when necessary, he said.


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