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Premier: China's steady growth can help

(China Daily)
Updated: 2008-10-06 06:32

Maintaining "steady and fast" growth is the largest contribution China can make to help the world overcome the current financial crisis stemming from the United States, Premier Wen Jiabao said Sunday.

Chinese Premier Wen Jiabao examines the growth of paddy in Gaosha Village, Qinnan District of Qinzhou City, South China's Guangxi Zhuang Autonomous Region, Oct. 5, 2008. Wen made an inspection tour in Guangxi on Oct. 4-5.  [Xinhua]

"It will be the biggest contribution to the world for a huge country with 1.3 billion people to maintain steady and fast growth in the long term," Wen said during an inspection to the Guangxi Zhuang autonomous region.

His comments came two days after the US House of Representatives approved a revised bailout plan to save banks and stop the financial turmoil from spreading. US President George W. Bush immediately signed the $700 billion plan into law.

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China has also taken "precautions and active measures" to deal with the crisis that has snowballed out of Wall Street, Wen said.

"We have solved outstanding contradictions and problems in economic development in a timely way and maintained the momentum in steady and fast economic growth," the premier said.

The fundamentals of the Chinese economy remain unchanged and it is developing toward a direction guided by the government's macroeconomic control policies, Wen said.

The country's financial market is safe and stable with generally adequate liquidity, he added.

On Saturday, the People's Bank of China, the central bank, welcomed the passage of the US bailout plan and hoped it will be implemented as soon as possible with positive results.

"We are glad to see the passage of the rescue bill by the House of Representatives and the Senate despite earlier twists and turns," the central bank said in a statement on its website.

"The Chinese government has been closely following the developments of the US financial crisis and its impact," it said.

China was willing to enhance coordination and cooperation with the US and other economies to overcome current difficulties and stabilize the international financial market, the central bank said.

"China and the US share common interests in ... a stable financial market," it said.

To minimize the impact of the US financial crisis, the central bank also said the country would strengthen "prudent supervision" of its banks and ask them to enhance their own risk management.

China grew 10.1 percent in the second quarter from a year earlier, making it one of the rare bright spots in the global economy, but the growth was well down from its blistering 11.9 percent expansion in 2007.

The central bank cut benchmark lending rates last month for the first time in six years.

Many economists saw the cut as a turning point in the country's monetary policy, with Beijing shifting its focus to supporting growth from battling inflation.

Consumer inflation fell to 4.9 percent in the year to August from a 12-year peak of 8.7 percent in February.

With capital flows between China and the world still heavily controlled, Chinese banks have had relatively little direct exposure to the turbulence rocking the world economy. Some have said that this may reinforce China's cautious, incremental approach to financial reform and innovation.

"A minority of commercial banks have some investment losses, but the range and scope is not big. These banks have already made sufficient preparations for risks that may arise," Liu Fushou, an official at the China Banking Regulatory Commission, said on State television on Saturday.

China Daily-Agencies