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Premier: Chinese economy shows signs of positive changes

(Xinhua)
Updated: 2009-04-12 08:35

PATTAYA - Chinese Premier Wen Jiabao, in an interview with Hong Kong and Macao reporters here Saturday, said that the Chinese economy showed signs of better than expected positive changes in the first quarter as a result of the economic stimulus package adopted by China.

Firstly, the domestic demand rose on a sustainable basis. Meanwhile, investment in fixed assets increased rapidly and consumer demand grew steadily and relatively rapidly. Although lower from the same period of last year, imports and exports grew on a month-on-month basis in the three-month period, Wen said.

This indicates that some sectors and enterprises in China are in a process of gradual recovery.

Secondly, industries above the designated size registered month-on-month growth, with a year-on-year increase of 3.8 percent in both January and February, and a year-on-year increase of 8.3 percent in March.

Thirdly, the purchase management index and the entrepreneur confidence index of the manufacturing industry both rose, indicating that the Chinese economy has begun to stabilize and recover in some fields, according to Wen.

Related readings:  Chinese more bullish on economy  China's economy to bottom out in mid 2009: World Bank  China economy has bottomed: central bank adviser  Economy's focus should now be on creating jobs

And fourthly, the market confidence went up and the economy became more active over the first three months, with increases in both the stock market and housing market transaction volumes.

The positive performances in economic fields suggest that the policies adopted by the central government of China have been timely and correct, and have led to successes, the premier noted.

The premier was here to attend the Association of Southeast Asian Nations (ASEAN) related summits. The Chinese premier went back home late Saturday ahead of schedule, after the Thai government postponed the summits because of domestic political unrest.

The premier said we should see that China's economy is still facing very serious hardships, which can be attributed to the shrink of external demand and a relatively sharp fall in exports. This has negatively impacted export enterprises, export-oriented industries and export-oriented zones, and has resulted in decreases in business profit making, declines in financial revenues and heavier pressure on employment, he said.

As the international financial crisis is deepening and spreading, we should never lose vigilance, Wen warned.

As the crisis has not touched its bottom, we can hardly say that the Chinese economy alone has got out of the crisis. China cannot save the world, nor can it survive without the world, Wen said. What we should do is to exert our utmost efforts to minimize the effect of the crisis, he said.

When answering questions whether China will introduce additional economic stimulus plans, Wen said the government should now step up efforts to carry out the policies and measures of the existing stimulus package. The earlier they are put into effect, the more beneficial and active they will be, he said.

Firstly, it is imperative to release the additional investment for stimulating the economy that has been included into the budget.

Secondly, specific rules for reforming and reviving a total of ten key industries should be formulated as early as possible.

And thirdly, efforts should be made to speed up the development of the social security system, Wen said, adding that the national medical and health-care system reform launched in recent days, which has drawn international attention, should be implemented as early as possible.

At the same time, it is essential to closely follow up the changing economic situation at home and abroad, and hammer out new response plans whenever necessary, said Wen.

Priority should be given to strengthening social security, improving the people's livelihood and strengthening protection of the ecological environment, he said.

In response to questions about the trial of cross-border trade deals in the Chinese yuan, Wen said the central government has decided to test the program in the city of Shanghai, as well as four cities in south China's Guangdong province -- Guangzhou, Shenzhen, Dongguan and Zhuhai.

Hong Kong and Macao will be included in the pilot program, and ASEAN members will become the first group of foreign countries to benefit from the scheme, Wen said, adding the regulatory documents governing the pilot program will be issued in a short time, Wen said.

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