Wen defends China's economic incentive package
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E-mail China.org.cn, September 11, 2012
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Chinese Premier Wen Jiabao is delivering a keynote speech at the opening ceremony. [People.com.cn] |
Chinese Premier Wen Jiabao on Tuesday dismissed accusations on the alleged side effects of China's 4-trillion yuan (631 billion U.S. dollars) stimulus package unveiled in 2008 in response to the global financial crisis.
Speaking at the opening ceremony of the Annual Meeting of the New Champions, also known as the 2012 Summer Davos, Wen responded to suggestions that China had paid an "undue price" during the execution of the package.
"I want to make it clear here that it was exactly 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.
The premier told the forum that, after the international financial crisis broke out, China fully implemented its plan to boost economic growth, improve people's livelihoods, overcome current difficulties and pursue long-term development.
Thanks to these efforts, China swiftly achieved an economic upturn and promoted the economic recovery of the world economy, according to Wen.
"These stimulus measures helped us keep the good momentum of economic development, maintain social stability and harmony and protect China's modernization process from major setbacks," he added.
China's reform, opening-up contributes to world economy
Wen recalled the Chinese government's achievements in the past decade, underlining confidence for the future of China's economy.
China's reform and opening-up has made important contribution to economic development in the world and the country is still in an important development period, said Wen.
China's reform made continuous breakthroughs in the past decade, the premier said, noting that the deepening of the reform process highly motivated the enthusiasm, initiative and creativity of the people and injected new vigor and vitality into economic and social development.
The win-win strategy of opening-up pursued by the Chinese government fully met its commitments made upon WTO accession, and placed equal emphasis on exports and imports and on attracting foreign investment and investing overseas, he said.
"This has not only helped us gain broader space for our development and economic growth, but also made important contribution to economic development in the region and the world," said Wen.
A shift from fast growth to sound growth was a fundamental change in the priorities of China's development in the past decade, Wen said, noting that China took strategic adjustment of the economic structure to raise the quality and efficiency of economic development.
China's financial system also became much more competitive and resilient to risks and played an essential role in countering the international financial crisis as the government deepened reform in this area, Wen added.
The government also made efforts to conserve resources and the environment to enhance capacity for sustainable development, as well as balance economic and social development to improve people's livelihood and promote social equity and justice, said Wen.
"Through ten years of hard work, we have elevated our economic and social development to a new level and laid a more solid material, technological and institutional foundation for future development," the premier said, stressing that China has established a path of scientific development.
The country is still in an important period of strategic opportunities for development and "the giant ship of the Chinese economy will sail ahead fast yet steadily and reach the shore of a brighter future," said the premier.
China's economy expected to further stabilize
China's economy is expected to further stabilize as recent measures on tax cuts, required reserve ratio, investment, infrastructure and trade facilitation are implemented and take effect, said Wen.
"Macroeconomic indicators show that China's economic and social development is in good shape," he said. "The speed of growth is still within the target range set at the start of the year, and although growth is slowing down, it is being more stable. As the recent measures are implemented and take effect, we expect the economy to further stabilize."
This year international political and economic situation has remained complicated and fluid, and brought more difficulties to China's economic development, Wen said.
In line with the overall requirement of making progress while maintaining stability, the Chinese government has strengthened and improved macro-regulation, followed a proactive fiscal policy and a prudent monetary policy, and made the policies more forward-looking, targeted and flexible, he said.
The government has properly handled relations between maintaining steady and robust economic development, adjusting the economic structure and managing inflation expectations, laid greater emphasis on stabilizing growth, and sustained steady and fast economic growth. It has intensified anticipatory adjustments and fine-tuning to respond to the new developments and problems in the economy, said Wen.
He mentioned a host of policy measures taken by the government since May, including stepping up structual tax cuts, lowering the required reserve ratio, cutting the benchmark deposit and lending rates twice, allocating 26.8 billion yuan (4.23 billion U.S. dollars) from the central budget to support enterprising undertaking technological upgrading, pushing forward trade faciliation and actively expanding imports and others.
"All these measures have helped boost market confidence and promote steady economic growth," said Wen.
According to the premier, in the first half of this year, China's GDP grew by 7.8 percent year-on-year. The Consumer Price Index (CPI) in July rose 1.8 percent over the same period of last year and inflationary pressure has notably eased.
"We are fully confident that we have the conditions and ability to overcome the difficulties on our way ahead, maintain steady and robust economic growth and achieve development at a higher level and with better quality for a long time to come," said Wen.
He said the Chinese government will fully utilize the ample fiscal and monetary policy space, fully tap the huge potential of domestic demand and fully motivate the various localities and departments.
It will give greater priority to stabilizing growth, continue to follow a proactive fiscal policy and a prudent monetary policy and step up anticipatory adjustments and fine-tuning, press ahead with strutural tax cuts and keep the increase of money and credit supply at a steady and moderate level, said Wen.
The government will also make stronger efforts to spur consumer demand, expand effective investment with a focus on bringing out the energy of nongovernmental investment, stabilize external demand and bolster the real economy, he said.
Work jointly for an early steady recovery
He also called on the international community to work jointly for an early steady recovery of the world economy.
"The international financial crisis has entered its fifth year, yet its underlying impact is still with us," he said, noting that advanced and emerging economies alike are all experiencing an economic slowdown, while the sovereign debt crisis in some countries continues to develop.
International financial and commodity markets are undergoing greater fluctuations, market expectations remain low and the downward risks in the global economy are not to be underestimated, Wen added.
However, the premier said, "We should recognize that major economies and international organizations are forging a broad consensus and taking focused measures to address the prominent challenges in the domestic, regional and global economies."
"It is all the more important for us to boost confidence and stick together to meet the difficulties head-on," he said.
Wen said that confidence provides a source of strength and technological innovation offers a fundamental means to overcome the crisis and green development is the main goal of economic transformation and opening-up and cooperation is an irreversible trend of the world.
The premier urged the international community to strengthen macroeconomic policy coordination, push forward reform of the global governance structure, resolutely oppose trade and investment protectionism, as well as advance trade and investment liberalization and facilitation.
Wen also called on entrepreneurs of all countries to invest more in technological R&D and product innovation, vigorously develop green industries that are energy efficient and environment-friendly, create new market demand and growth areas, and bring about an all-win outcome where businesses boom, industries get stronger, the economy prospers and society progresses.
"I have full confidence in the bright future of the Chinese economy and world economy," the premier said, calling on the international community to work closely together to disperse the shadow of the international financial crisis.
The three-day forum, themed "Creating Future Economy", took place in northern Chinese port city of Tianjin and gathered about 1610 delegates worldwide. It was initiated according to a joint proposal by the Geneva-based World Economic Forum and the Chinese government. The northern Chinese port cities of Dalian and Tianjin have hosted the forum in turn since 2007.
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