Financial crisis not bottomed out: Wen

March 1st, 2009 - 3:52 pm ICT by IANS  

Beijing, March 1 (Xinhua) The global financial crisis was not yet over, said Chinese Premier Wen Jiabao during his first-ever online chat.
He said China was “ready to take firmer and stronger actions whenever necessary”.

Wen Saturday said China’s east coastal areas were hit hard, where the economy is more export-dependent and labour intensive. The decline of international market demands also caused the unemployment of a large number of migrant workers.

China’s gross domestic product grew 9 percent year-on-year last year, the lowest since 2001 when an annual rate of 8.3 percent was recorded.

To cushion the blow of the international financial crisis, Wen said China announced a package of stimulus plans covering four aspects.

The first is the announcement of a 4-trillion-yuan ($588 billion) economic stimulus and tax cuts. The second involves revitalising ten key industries. The third is technical upgrading and the fourth is the building of a comprehensive social security network.

Wen said: “The stimulus measures have shown initial effects and produced good results in certain areas and fields.”

“Some key indicators showed the economic situation has somewhat turned better. But those were just temporary indices and couldn’t be fully compared with the past figures,” he said.

Wen said one indicator he valued most was power generation. “Starting from mid February, power generation and consumption have both resumed growth,” he said.

“We must fully realise we are facing a long-term and arduous task.

“We must strengthen confidence in the face of the crisis and be ready to take firmer and stronger actions when necessary,” he added.

Wen said migrant workers had been hit the hardest during the financial crisis.

When answering netizens’ concerns over income discrepancies, Wen said narrowing the rich-poor gap could not be achieved “in a static state” and should be conducted alongside with economic development.

He acknowledged that China’s social and economic development does have the problem of “imbalanced, discordant and unsustainable” growth.

The major problem is the imbalance between different regions, between the urban and rural areas and income imbalance, he said.

He said he still has confidence in China’s economy and the development of Chinese enterprises.

In a reply to complaints over the slump in stock market, he said he is confident about the capital market as its performance is decided by economic fundamentals and company profitability.

Housing prices were among the most frequently asked questions raised by netizens during the chat.

Wen said he hopes to see a stable and healthy development of the country’s real estate sector in the face of the global financial crisis.

China should strengthen management and regulation to keep housing prices and the scale of property construction “at a reasonable level”, he said.

The government has urged for stronger confidence in the real estate market while pledging more money and energy to meet the needs of low-income families, he said.

The government fund must be used properly to ensure house construction is economical, safe and of good quality, said Wen. He also noted the construction should save land and suit people’s needs.

“Auditing and supervision should go along with all property projects,” said Wen. “Problems must be dealt with whenever they emerge.”

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