Nov 7, 2012

China - Wen Jiabao confident over China's economy

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The economy is stable and GDP goals are attainable, Premier Wen Jiabao said during an address on Monday to the Asia-Europe Meeting in Vientiane, Laos.

His remarks will help boost global confidence as Europe battles its debt crisis, experts said.

"The Chinese economy has grown steadily," the premier said after analysing figures for the first three quarters.

China's GDP grew by 7.7 per cent in the nine months to the end of September, with a total of 10.24 million jobs created.

And "in September, major economic indicators registered an increase", Wen added.

China's exports grew 9.9 per cent that month, exceeding market expectations.

"When all policy measures are put in place and produce results, the Chinese economy will head toward steadier growth," Wen said.

"We are not only confident of meeting development targets for this year, but also have the confidence, the conditions and ability to achieve development of a better quality, at a higher level, in the long run."

China has set a growth target of 7.5 per cent for this year.

The premier's remarks were a rebuttal of the view that China is heading for a hard landing, said Zhao Junjie, a specialist in European studies at the Chinese Academy of Social Sciences.

"Wen cited figures to let the world know that China has the determination and capability to improve its economy," he said.

Wen arrived in Laos on Sunday night. He will leave the summit to prepare for the 18th National Congress of the Communist Party of China, which opens on Thursday, after giving a speech on global issues on Tuesday morning.

Foreign Minister Yang Jiechi will remain at the meeting.

The arrangement reflects the importance Beijing attaches to the international economic situation, experts said.

In his speech on Monday, the premier noted China has taken a responsible role in handling the global crisis.

For instance, China has pushed for the reform of the international financial system and sent 33 major commercial missions overseas to boost global trade, Wen said.

He added that based on the significant appreciation of the yuan in recent years, the real exchange rate of the currency has risen by 16 per cent. The ratio of the current account surplus to GDP has dropped from 10.1 per cent in 2007 to the current 2.6 per cent.

"These figures show that China is an important engine for world economic growth and has played a crucial role in driving global economic recovery," he said.

However, the world still faces "downside risks", Wen said.

The summit comes days after German Chancellor Angela Merkel and leaders of five global financial organisations said on October 30 that "the recovery of the global economy is on a fragile track and prospects still remain uncertain".

They called for fiscal consolidation and structural reform.

According to the International Monetary Fund, the world economy is estimated to grow 3.3 per cent in 2012 and 3.6 per cent in 2013.

AFP said that Europe's "heavyweight contingent, including French President Francois Hollande and Italian Prime Minister Mario Monti", at the meeting "underscores Europe's growing engagement with Asia's rising stars".

European exports to its 19 Asian ASEM partners rose by 12.8 per cent year-on-year in the first half of 2012. Their imports from Asian members also grew by 1.6 per cent.

The EU should work closer with Asia, China in particular, to cope with the debt crisis, said Chen Fengying, a researcher of global economics at the China Institutes of Contemporary International Relations.

"The EU should remove its high-tech export ban to Asia, and end trade protectionism against China," Chen said.

Switzerland and Norway, along with South Asia's Bangladesh, joined the summit, taking membership of the group up to 51, covering about 60 percent of both the world's population and trade volume.

"The eurozone crisis has heightened awareness of their economic interdependence: Europeans need Asia's still-growing markets to boost flagging growth while Asians recognise their vulnerability to eurozone woes," Shada Islam, head of policy at the Brussels-based think tank Friends of Europe, told AFP.

The ASEM summit, launched in Thailand in 1996, is held every two years.

Li Xiaokun and Zhou Wa

China Daily


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