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August 10, 2009

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Home » Business » Economy

Wen says policies to continue

PREMIER Wen Jiabao said the government's mix of active fiscal policies and relaxed monetary settings must stay in place while economic growth faces domestic and external weaknesses.

Visiting east China's Jiangsu Province over recent days, Wen stressed the government's continued commitment to these policies, indicating that no shift is looming.

"We are persisting with implementing active fiscal policies and appropriately relaxed monetary policies because we still face many hardships and challenges, the international economic outlook remains unclear, and pressure from falling external demand remains heavy," Wen said during the visit to the province, according to remarks posted yesterday on the central government's Website.

"The impetus for self-sustaining growth in the economy is still not strong ...Therefore, the direction of macro-economic policy cannot change," Wen said.

Chinese officials face domestic and foreign investors jittery over the direction of policy, and Wen's words add to a recent drum beat of comments stressing that the policy recipe remains unchanged.

Senior Chinese economic officials last Friday also quashed market speculation that the central government might be starting to unwind its loose monetary policies introduced to prop up growth in the world's third-largest economy.

The benchmark Shanghai Composite Index fell 4.4 percent last week, its biggest loss in five months, as investors fretted that the central bank was being less generous in flooding the banking system with cash to support spending and investment.

Figures for last month out later this week are likely to show that China's recovery is on course. Gross domestic product grew 7.9 percent in the second quarter from a year earlier.

But China is leaving nothing to chance as long as the global economy remains in the doldrums, depriving the country of the export demand that has been a big driver of growth in the past few years.


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