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Wen stays the course

PREMIER Wen Jiabao this week has been reaffirming the government's commitment to its "proactive fiscal policy and relatively easy monetary policy."

Wen made the remarks at a gathering of economists and business people in Beijing yesterday. Two such gatherings were held recently to elicit expert views on the economic situation.

Wen's comments came after China Banking Regulatory Commission official Wang Huaqing warned on Tuesday of possible risks in the financial system posed by rapid credit growth and a concentration of loans in some industries and businesses.

China's new yuan-denominated loans hit 1.53 trillion yuan (US$224) billion) in June, more than double the 664.5 billion yuan in May.

The growth brought new yuan loans in the first half to 7.37 trillion yuan, exceeding the full-year target of 5 trillion yuan.

Wen said that maintaining "steady and relatively fast" economic growth remains the foremost task at present, noting that the economy development momentum does not mean the difficult period is over.

The foundation of economic recovery is still unstable, the negative influence from the international financial crisis is not waning, weak external demand still persists, some sectors and businesses still face difficulty in their operations and unemployment pressure cannot be fundamentally eased in the near future, Wen said.

He also said overcapacity is apparent and the fiscal deficit has increased.

The premier stressed the need to adjust the economic structure, advance coordinated development of urban and rural areas and balance development of various regions, boost scientific and technological innovation, deepen reform and opening and stimulate domestic consumption.


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