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China economy under pressure; will meet growth target: Wen

Last Updated: Wednesday, September 12, 2012 - 16:03

Beijing: Chinese Premier Wen Jiabao has admitted that the country's economy is under pressure, which has led to apprehensions at home and abroad, but said that it will be able to meet this year's growth targets.

Besides, he strongly defended USD 570 billion stimulus package extended in 2008 to revive the economy, refuting criticism that China paid "undue price" by relying more on credit investment which ended up creating bad loans.

China is facing economic pressure but the government is confident and will be able to meet this year's annual economic target, Wen told the Summer Davos Forum in Tianjin last night.

He cited ample fiscal policy space, huge potential in domestic demand, hopeful economic restructuring and a stable political and social environment for this optimism.

"The giant ship of Chinese economy will surely sail ahead quickly yet steadily and reach the shore of a brighter future," said Wen, who will be retiring later this year after a decade long stint as the Premier.

Lacklustre global demand for its once flourishing exports and slowing property investments have cooled China's economic growth to 7.6 per cent in the second quarter of 2012, the slowest rate since 2009.

To bolster the softening economy, the government has reduced interest rates twice this year, cut taxes for small businesses, encouraged private businesses to invest in sectors previously closed to them and fast-tracked construction projects.

Last week, China's top economic planner approved 55 investment projects worth one trillion yuan (USD 157.7 billion) to build highways, ports and railways across the country.

Chinese officials say that it provides room for China, offering great development potential in the mid and long-term.

Wen, meanwhile, defended 2008 massive stimulus package doled out in the form heavy subsidies to buy consumer and household goods, which he said helped China secure growth amid the global economic crisis.

"I want to make it clear here that it was precisely due to our resolute decision and scientific response that China was able to avoid factory closures, job losses and the return of migrant workers to their home villages," Wen said, answering critics of his stimulus package.

Thanks to these efforts, China swiftly achieved an economic upturn and promoted the economic recovery of the global economy, Wen said.

"These stimulus measures helped us keep the good momentum of the economic development, maintain social stability and harmony and protect China's modernisation process from major setbacks," he noted.


First Published: Wednesday, September 12, 2012 - 14:18
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