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Global crisis makes 2008 China's worst year in recent times: Wen
2008-11-03
BEIJING (AFP) - Chinese Premier Wen Jiabao said the global economic crisis had made 2008 the worst year for China's development in recent memory, and warned of worse to come. His comments, in a signed article in a journal published by the Communist Party, come as China struggles with its slowest growth in five years. "We must be aware that this year is the worst in recent times for our economic development," Wen said in the article in Qiushi over the weekend. "The global financial turmoil and the economic downturn are getting worse. Inflationary pressure remains large as world oil prices are still at a high level despite some corrections." "All these negative factors have affected and will continue to affect China," he warned. China's growth slowed to nine percent in the third quarter of this year, the lowest quarterly figure since the middle of 2003, partly due to a slowdown in exports. The country's trade surplus for the first nine months of the year reached 180.9 billion dollars, down 2.6 percent year-on-year, according to customs data. Experts said Wen's article, targeting mainly Party cadres, aimed to prepare officials who still hold divergent views about how badly China would be affected in the worst-case scenario amid the global financial crisis . "It probably is meant to remind everyone that (the financial crisis) may be more serious and last longer than previously imagined," Su Chang, a Beijing-based analyst with research firm CEB Monitor Group, told AFP. He said some recent policies, including cutting interest rates three times in fewer than two months, are mainly fine-tuning. "These policies probably indicated that quite a number of people in the policy-making body were not very pessimistic about... an economic slowdown." Wen said maintaining quick growth should "take an even more prominent position" among the government's priorities. Meanwhile, he called for a continued focus on inflation, which has emerged as a top policy concern over the past year. "We should fully grasp the harm that inflation can cause to economic growth, people's livelihood and social stability," he said. The consumer price index rose 4.6 percent year on year in September, compared with a 12-year high of 8.7 percent in February, which was sharply higher than the 4.8-percent target set by the government at the beginning of 2008. "We should... increase the focus, flexibility and effectiveness of the macro control policies, so as to maintain a balance between achieving stable and relatively fast economic growth and curbing inflation," Wen said. In his article, Wen also urged a boost to domestic consumption to reduce the country's dependence on exports and therefore its exposure to external risks. "We have to work hard to alleviate and avoid excessive dependence on foreign demand, because it squeezes the real demand inside the country and increases the risk of external impacts," he said. "Given the current world economic downturn and the serious export situation, encouraging domestic demand, especially consumption, is particularly important for expanding economic growth potential... and preventing a slowdown." He added the government would seek to reform the country's income distribution to "ease and remove the worries that had prevented residents from consuming more."
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