China PM Wen reassures over economy

Sunday, April 19, 2009 at 9:28 PM Posted by Beijing News


Chinese Premier Wen Jiabao reassured an international meeting on Saturday that his nation's economy was faring "better than expected" despite exports falling because of the global slowdown.

"China's stimulus package has already shown results, the economy has seen positive changes and the situation is better than expected," Wen said at the opening of the Boao Forum on the southern Chinese island province of Hainan.

Wen told more than 1,600 delegates at the forum, which meets here annually to promote regional economic integration, that progress had been made in several key economic indicators despite the onset of the financial crisis.

"Investment growth has accelerated, consumption has increased quite rapidly and domestic demand continues to rise," Wen said in the keynote speech, broadcast live on China's state television.

His comments -- apparently aimed at his domestic audience as well as the wider international community -- came two days after China posted growth of 6.1 percent in the first quarter of the year, the slowest in at least a decade.

Despite his upbeat assessment, Wen warned an audience that included Pakistani President Asif Ali Zardari that there were still challenges ahead and that "China's economic and social development faced big difficulties."

"The main ones are: external demand continues to shrink, there has been a large drop in exports... there is overcapacity in some industries, the pick-up in industrial growth is sluggish, economic efficiency continues to drop."

Wen added that fiscal revenue was slowing and that the employment situation was still serious.

However, some analysts have agreed that a four-trillion-yuan 580-billion-dollar stimulus package launched in November by the government appears to have had some effect.

The Chinese premier pointed to a 28.6 percent rise in urban fixed asset investments in the first quarter as an example of this, while calling for closer cooperation between Asian nations and warning against protectionism.

"To counter the financial crisis effectively, Asian countries should each run their own affairs well but also step up cooperation... and make Asia a key engine in reigniting world economic growth," he said.

The three-day Boao Forum has been an annual event since 2001, bringing together leaders in government, business and academia in Asia and other continents to discuss pressing issues in the region and the rest of the world.

Later Saturday, Wen praised relations between Beijing and the new administration in Washington during a meeting with former US president George W. Bush, state media reported.

"Since President Barack Obama has come to power, Sino-US relations have got off to a good start," Wen told Bush at the summit, in comments reported on China's state television.

"The two countries are working together to establish comprehensive, cooperative Sino-US relations in the 21st century," Wen was quoted as saying.

The former US president, one of the keynote forum speakers, said during a banquet speech that the centre of the world economy had moved from the Atlantic to Asia-Pacific, state Xinhua news agency reported.

"That's why I have never missed a single APEC meeting when I was in office because I know how important it is to prosperity," Bush said, referring to the Asia-Pacific Economic Cooperation forum.

Addressing the world's financial problems, Xinhua quoted Bush as saying: "The global financial system does need reform, needs greater transparency."



Bodybuilders compete in the Open Kiev Cup for Bodybuilding competition in Kiev. AFP/Sergei Supinsky

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