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China assures world on stimulus efforts

By Fu Jing and Si Tingting in Beijing and Bi Xiaoning in Dalian (China Daily)
Updated: 2009-09-11 06:49

China will not end its stimulus initiatives at a time when the global economy is starting to see "slow and zigzag" recovery from its free fall, Premier Wen Jiabao assured global business leaders Thursday.

Instead, he said the country will "enrich its stimulus package" to better link it to the creation of new engines of China's growth.

"We cannot and will not change the direction of our policies at an inappropriate time," Wen said at the opening of the World Economic Forum in Dalian, Liaoning province.

"The foundations of China's economic recovery are not stable, not solidified and unbalanced and the global economic outlook is uncertain," he said.

"The top priority of our work is to maintain stable and quick economic growth, so we will unswervingly stick to a relatively loose monetary policy and an active fiscal policy," said Wen.

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Economists and analysts saw Wen's rejection of an early "stimulus exit" as a firm international commitment to shore up the global economy and they said the subject is sure to be further debated at the upcoming G20 leaders summit in Pittsburgh, Pa., late this month.

Foreign Ministry spokesperson Jiang Yu said yesterday in Beijing that China hopes the forum will help tackle the world economic downturn and send a "stronger signal" for global recovery.

"It's too early to discuss the stimulus exit timetable because the global economy is still filled with uncertainties," Bi Jiyao, a senior economist with the National Development and Reform Commission, told China Daily.

Bi said developed economies may consider withdrawing their fiscal stimulus measures around the middle of next year, if the world economy steadily picks up.

China's Premier Wen Jiabao (L) waves next to World Economic Forum (WEF) founder Klaus Schwab after his speech at the opening ceremony of the WEF meeting, in China's port city Dalian September 10, 2009. [Agencies]

"For China, I think we will continue with strong fiscal spending but we should readjust where the taxpayers' money is going," said Bi.

Wen said China would insist on policy consistency to ensure high-speed economic growth.

"We should fully implement and continuously improve policies and discover and resolve new problems in a timely manner," said Wen. He warned about the risk of inflation even though the country was still experiencing deflation.

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