Premier Wen Jiabao claimed China is on the road to recovery
China’s economic problems are not as bad as everyone fears, according to the country’s Premier.
Addressing participants on the first day of the World Economic Forum, Chinese Premier Wen Jiabao said: “From late last December, we have seen signs in the recovery of the Chinese economy; the signs are small ones but they give me hope.” He pointed to increases in bank lending, prices of industrial products and consumption.
Despite falling commodity prices, he said growth in consumption has been maintained at between 20% and 21%.
Wen admitted that the global financial crisis has had a ‘rather big impact’ on China’s economy. ‘We are facing severe challenges, including notably shrinking external demand, overcapacity in some sectors, difficult business conditions for enterprises, rising unemployment in urban areas and great downward pressure on economic growth,’ he said.
However, he expressed confidence that with hard work, it should be able to meet its 2009 growth target of 8%. The Chinese economy grew 9% last year.
Wen blamed the current problems on ‘inappropriate macroeconomic policies of some economies and their unsustainable model of development’. He also warned that trade protectionism would only worsen and prolong the crisis.