China’s Wen Sees Some Sign of Recovery After Stimulus (Update2)
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By Li Yanping
Feb. 28 (Bloomberg) -- China’s economy has shown some signs of recovery after the government started implementing its 4 trillion yuan ($585 billion) economic stimulus package, Premier Wen Jiabao said.
“The government’s measures to tackle the financial crisis have shown preliminary results,” Wen said during an online chat with the public on the government’s Web site today. Wen cited rising loans, retail sales in January and growing power output and consumption since the middle of February as signs of relief.
China’s economy, the world’s third-largest, expanded by 6.8 percent in the fourth quarter, the slowest pace in seven years, as the global financial crisis trimmed exports and reduced industrial production. The government in November pledged 4 trillion yuan of spending on infrastructure and key projects, reduced benchmark lending rates five times since September and cut taxes on most exports to combat the effects of a slowdown.
China’s consumer spending jumped by 18 percent in January, bank loans surged and power output and consumption regained growth since the middle of this month, Wen said today.
Still, Wen cautioned that the positive data may be temporary or distorted by seasonal factors.
“We must understand that the crisis will be prolonged and arduous,” Wen said, “We must be ready to take more forceful measures at any time to alleviate damage the crisis may do.”
Social Welfare
China is facing its most difficult year this century with the risk of economic slump and social instability, the government said earlier this year. Wen will deliver his annual government work report on March 5 at the opening of the National People’s Congress in Beijing.
The nation’s economy, which has already seen the jobs of 20 million migrant workers eliminated, may slow to 6.3 percent in the three months to March 31, the weakest pace since 1999, according to the median estimate of 14 economists surveyed by Bloomberg News.
The government aims to cap its official urban unemployment rate at below 4.6 percent in 2009, which, if met, would be the worst in almost three decades. Social welfare will be the first priority in the government’s spending, Wen said today, adding that 850 billion yuan will be earmarked for health-care reform over the next three years.
Since last year the government has also stepped up efforts to tap the nation’s 7 million rural consumers to boost domestic demand as overseas sales plunge.
Rural Economy
To boost the income of farmers, which was only a third of that of urban dwellers by the end of last year, the government will pledge 120 billion yuan in rural subsidies this year and offer 40 billion yuan to help farmers buy home appliances, machinery and automobiles, Wen said today.
An early recovery of China’s economy is “essential” for more new jobs, higher incomes and expanding domestic consumption, Wen said today, adding he has confidence in the nation’s economy.
The government will spend more on building homes for low- income earners, Wen said. Real estate construction and prices should grow at “reasonable” levels, he added.
Wen today also pledged closer cooperation with Taiwan to tackle the impact of the financial crisis after cross-strait relations entered “a new stage of peaceful development.”
To contact the reporters on this story: Li Yanping in Beijing at [email protected]
Last Updated: February 28, 2009 04:51 EST
Email | Print | A A A
By Li Yanping
Feb. 28 (Bloomberg) -- China’s economy has shown some signs of recovery after the government started implementing its 4 trillion yuan ($585 billion) economic stimulus package, Premier Wen Jiabao said.
“The government’s measures to tackle the financial crisis have shown preliminary results,” Wen said during an online chat with the public on the government’s Web site today. Wen cited rising loans, retail sales in January and growing power output and consumption since the middle of February as signs of relief.
China’s economy, the world’s third-largest, expanded by 6.8 percent in the fourth quarter, the slowest pace in seven years, as the global financial crisis trimmed exports and reduced industrial production. The government in November pledged 4 trillion yuan of spending on infrastructure and key projects, reduced benchmark lending rates five times since September and cut taxes on most exports to combat the effects of a slowdown.
China’s consumer spending jumped by 18 percent in January, bank loans surged and power output and consumption regained growth since the middle of this month, Wen said today.
Still, Wen cautioned that the positive data may be temporary or distorted by seasonal factors.
“We must understand that the crisis will be prolonged and arduous,” Wen said, “We must be ready to take more forceful measures at any time to alleviate damage the crisis may do.”
Social Welfare
China is facing its most difficult year this century with the risk of economic slump and social instability, the government said earlier this year. Wen will deliver his annual government work report on March 5 at the opening of the National People’s Congress in Beijing.
The nation’s economy, which has already seen the jobs of 20 million migrant workers eliminated, may slow to 6.3 percent in the three months to March 31, the weakest pace since 1999, according to the median estimate of 14 economists surveyed by Bloomberg News.
The government aims to cap its official urban unemployment rate at below 4.6 percent in 2009, which, if met, would be the worst in almost three decades. Social welfare will be the first priority in the government’s spending, Wen said today, adding that 850 billion yuan will be earmarked for health-care reform over the next three years.
Since last year the government has also stepped up efforts to tap the nation’s 7 million rural consumers to boost domestic demand as overseas sales plunge.
Rural Economy
To boost the income of farmers, which was only a third of that of urban dwellers by the end of last year, the government will pledge 120 billion yuan in rural subsidies this year and offer 40 billion yuan to help farmers buy home appliances, machinery and automobiles, Wen said today.
An early recovery of China’s economy is “essential” for more new jobs, higher incomes and expanding domestic consumption, Wen said today, adding he has confidence in the nation’s economy.
The government will spend more on building homes for low- income earners, Wen said. Real estate construction and prices should grow at “reasonable” levels, he added.
Wen today also pledged closer cooperation with Taiwan to tackle the impact of the financial crisis after cross-strait relations entered “a new stage of peaceful development.”
To contact the reporters on this story: Li Yanping in Beijing at [email protected]
Last Updated: February 28, 2009 04:51 EST
