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Wen cites reasons for economic optimism

Premier Wen Jiabao said yesterday that China's economy is at a critical moment as it begins to recover "steadily."

Wen told an executive meeting of the State Council, China's Cabinet, that economic performance has started to show positive changes; favorable factors were increasing; and the overall situation had stabilized and was moving upwards.

He said the government should continue its "proactive fiscal policy and moderately relaxed monetary policy."

Investment growth is accelerating, consumption is maintaining a rapid increase, and domestic demand is playing a stronger role in boosting economic growth, Wen said.

Agricultural and industrial production is growing, and regional coordinated development is making progress.

The financial market is stable and investor confidence stronger, according to Wen. Urban employment is rising, and reconstruction of areas affected by last year's May 12 earthquake is speeding up.

Government measures to fight the global economic crisis proved effective and should continue to be implemented, he said.

Not all rosy

But it should also be noted that the foundation for economic recovery is not stable and many uncertainties remain, Wen said, citing sluggish exports, the fiscal deficit and trade protectionism.

The premier called for "clear-headed judgement" and readiness to face the "difficulties and complexities" that might occur in the long term.

He urged local governments to further promote economic restructuring, guarantee the stable development of agriculture, encourage technological innovation and work to enhance energy conservation and environmental protection.

Comprehensive efforts should be made to boost domestic demand to power economic growth, Wen said, singling out measures such as subsidies for home appliances and automobiles in rural areas.

The housing market should be "properly guided," Wen said, adding that tourism, entertainment and cultural programs should be developed.

He also highlighted the importance of the coordinated development of urban and rural areas, and called for the further deepening of reform and opening and the building of social insurance systems.



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