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Wen: China set to act if crisis grows

Source: Xinhua | March 1, 2009, Sunday | Print Edition

THE global financial crisis had not yet hit bottom and its impact was still spreading, Premier Wen Jiabao said yesterday during his first-ever online chat.

He told Netizens that China was "ready to take firmer and stronger actions whenever necessary."

"We must fully realize we are facing a long-term and arduous task," he said.

He explained the major impact of the crisis was on China's real economy instead of the financial sector, which after more than 10 years of reform, was relatively stable, healthy and capable of withstanding the crisis.

Wen said the worst affected were China's east coastal areas, where the economy was more export-dependent and labor intensive. The decline of international market demand also caused unemployment of a great number of migrant workers.

To cushion the impact of the crisis, China has announced a package of stimulus plans, covering four aspects. The first is a 4-trillion-yuan (US$588 billion) economic plan with tax cuts, the second the revitalization of 10 key industries, the third involves technical upgrading, and the last to build a comprehensive social security network.

He said the stimulus measures had shown initial effects and produced good results in certain areas.

For example, the country had seen consecutive growth in credit supply, with new loans of around 440 billion yuan in November, 770 billion yuan in December and 1.63 trillion yuan in January, Wen said.

He also cited figures on stronger retail sales and the rebound of power generation and use.

Consumption rose 18 percent year on year in January, while power generation in the February 11-20 period increased 15 percent year on year, which was up 13.2 percent from the first 10 days of the month, he said.

"Some key indicators show the economic situation has somewhat turned better," he said. "But those were just temporary indices and couldn't be fully compared with past figures."

Wen said one indicator he valued most was power generation. "Starting from mid-February, power generation and consumption have both resumed growth," he said.

"We must strengthen confidence in the face of the crisis and be ready to take firmer and stronger action when necessary," he said.

He expressed confidence in China's capital market, noting the government had the responsibility to establish an open, fair and transparent market environment.

"I have confidence in China's economy and the development of Chinese enterprises and therefore in the country's capital market, too," he said.

Wen said he was "very concerned about the stock market," whose role was to absorb private capital to support the economy as well as increase investors' income.

China's benchmark Shanghai Composite Index has shed more than 60 percent since hitting an all-time high in October 2007.


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