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Thursday, 5 March 2009
Premier Wen reaffirms 8pc growth, but no new stimulus
Premier Wen Jiabao assured on Thursday that mainland will achieve 8 per cent growth this year despite a deepening financial crisis, setting out export support and spending programmes to shore up the economy.
Premier Wen reaffirms 8pc growth, but no new stimulus
Reuters in Beijing 5 March 2009
Premier Wen Jiabao assured on Thursday that mainland will achieve 8 per cent growth this year despite a deepening financial crisis, setting out export support and spending programmes to shore up the economy.
In the text of his annual work report to the National People’s Congress, the nation’s largely ceremonial parliament, Mr. Wen said the 8 per cent goal was a realistic one.
“It needs to be stressed that in projecting the GDP growth target at 8 per cent, we have taken into consideration both our need and ability to sustain development in China,” he said.
“As long as we adopt the right policies and appropriate measures and implement them effectively, we will be able to achieve this target.”
Global markets soared on Wednesday on speculation that Mr. Wen would add to a 4 trillion yuan (HK$4.5 trillion) stimulus plan unveiled in November to head off a rise in unemployment that could threaten the social stability prized by the ruling Communist party.
But while he projected a leap in mainland’s budget deficit this year to 950 billion yuan, Mr. Wen announced no increase in the headline cost of the pump-priming package to revive the world’s third largest economy, which has been hit by a slump in demand for its exports.
The expected this year budget deficit would be less than 3 per cent of national income - a quarter of what the United States is planning for.
Balancing optimism with caution, Mr. Wen said mainland faced unprecedented difficulties and challenges due to the worldwide financial crisis.
“Demand continues to shrink on international markets; the trend toward global deflation is obvious; and trade protectionism is resurging. The external economic environment has become more serious, and uncertainties have increased significantly.”
Mr. Wen said the government would use tax incentives and fiscal policies to support exports, while reaffirming Beijing’s long-standing policy if keeping the exchange rate of the yuan “basically stable”.
Mr. Wen has said he is encouraged by the economy’s response to the blueprint, which envisages massive spending on infrastructure, affordable housing and the environment.
Bank lending has surged - Mr. Wen set an ambitious target of 5 trillion yuan in new loans this year, just above last year’s level - and surveys of manufacturers have perked up.
But exports have collapsed and a recovery in steel prices that was triggered by the stimulus plan has gone into reverse, suggesting to many economists that mainland is not out of the woods yet.
“The global financial crisis continues to spread and get worse,” Mr. Wen said in his speech.
He said his government would seek to prevent any threats from social unrest, which officials have warned could flare up as workers and farmers confront unemployment and income cuts.
Officials estimate about 20 million migrant workers have already lost their jobs due to the closure of export-dependent factories and a downturn in the construction industry.
“We will improve the early warning system for social stability to actively prevent and properly handle all types of mass incidents,” he said, using the government’s euphemism for riots, protests and demonstrations.
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Premier Wen reaffirms 8pc growth, but no new stimulus
Reuters in Beijing
5 March 2009
Premier Wen Jiabao assured on Thursday that mainland will achieve 8 per cent growth this year despite a deepening financial crisis, setting out export support and spending programmes to shore up the economy.
In the text of his annual work report to the National People’s Congress, the nation’s largely ceremonial parliament, Mr. Wen said the 8 per cent goal was a realistic one.
“It needs to be stressed that in projecting the GDP growth target at 8 per cent, we have taken into consideration both our need and ability to sustain development in China,” he said.
“As long as we adopt the right policies and appropriate measures and implement them effectively, we will be able to achieve this target.”
Global markets soared on Wednesday on speculation that Mr. Wen would add to a 4 trillion yuan (HK$4.5 trillion) stimulus plan unveiled in November to head off a rise in unemployment that could threaten the social stability prized by the ruling Communist party.
But while he projected a leap in mainland’s budget deficit this year to 950 billion yuan, Mr. Wen announced no increase in the headline cost of the pump-priming package to revive the world’s third largest economy, which has been hit by a slump in demand for its exports.
The expected this year budget deficit would be less than 3 per cent of national income - a quarter of what the United States is planning for.
Balancing optimism with caution, Mr. Wen said mainland faced unprecedented difficulties and challenges due to the worldwide financial crisis.
“Demand continues to shrink on international markets; the trend toward global deflation is obvious; and trade protectionism is resurging. The external economic environment has become more serious, and uncertainties have increased significantly.”
Mr. Wen said the government would use tax incentives and fiscal policies to support exports, while reaffirming Beijing’s long-standing policy if keeping the exchange rate of the yuan “basically stable”.
Mr. Wen has said he is encouraged by the economy’s response to the blueprint, which envisages massive spending on infrastructure, affordable housing and the environment.
Bank lending has surged - Mr. Wen set an ambitious target of 5 trillion yuan in new loans this year, just above last year’s level - and surveys of manufacturers have perked up.
But exports have collapsed and a recovery in steel prices that was triggered by the stimulus plan has gone into reverse, suggesting to many economists that mainland is not out of the woods yet.
“The global financial crisis continues to spread and get worse,” Mr. Wen said in his speech.
He said his government would seek to prevent any threats from social unrest, which officials have warned could flare up as workers and farmers confront unemployment and income cuts.
Officials estimate about 20 million migrant workers have already lost their jobs due to the closure of export-dependent factories and a downturn in the construction industry.
“We will improve the early warning system for social stability to actively prevent and properly handle all types of mass incidents,” he said, using the government’s euphemism for riots, protests and demonstrations.
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