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Stimulus package is already showing gains, says premier

CHINA'S economic stimulus package plan is already paying off with positive changes evident in the economy, Premier Wen Jiabao said yesterday.

"The situation is better than expected," Wen told the opening ceremony of the Boao Forum for Asia annual conference in the scenic town in southern China's Hainan Province.

The "swift" and "decisive" measures taken by China to deal with the crisis proved essential for easing major problems in the economy, shoring up confidence and stabilizing expectations, the premier said.

The gross domestic product of the world's third largest economy rose 6.1 percent in the first quarter, the slowest pace in a decade, he said.

However, the situation is "better than expected," the premier added, citing pick-ups in investment, consumption and industrial output, as well as ample liquidity in the banking system.

According to Wen, domestic demand has been boosted in a comprehensive way, industrial output has gradually stabilized, and agricultural production is stable.

There has been encouraging progress in economic restructuring and employment has risen, with 2.68 million jobs created in urban areas in the first quarter.

Wen said the stimulus policies were primarily aimed at boosting domestic demand and at the same time made full use of external demand, for both to drive economic growth.

"This will lead to a transformation toward a more balanced growth pattern," Wen said.

However, Premier Wen warned against losing sight of the fact that the international financial crisis is still spreading.

"The basic trend of the world economic recession is not reversed, problems in the financial system remain unsolved and the worsening of the real economy has been more serious than expected," he said.

The global economic recovery may be a long and tortuous process, he said.

He said the crisis had presented China with great challenges in economic and social development including sharp decline in exports, greater difficulties in stabilizing agriculture production and increasing farmer incomes, industry overcapacity, slow recovery in industrial growth and severe pressure of unemployment.

Wen vowed China will continue to work with other Asian countries to actively tackle challenges and advance all-round cooperation with a view to enriching and energizing cooperation and promoting peace and prosperity.

"Asia is one of the most dynamic and promising regions in the world economy. Together, we make up 60 percent of the world's population, a quarter of the global economy and a third of global trade," Wen said.

The financial stress starting from developed countries has nonetheless challenged Asian countries. Sluggish exports, shrinking investment and demand, fewer jobs and lower income have plagued many emerging economies in the region.

The World Bank's March forecast lowered the estimated GDP growth of 20 East Asian and Pacific developing economies for this year by 1.4 percentage points to 5.3 percent.


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