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China: key currency countries need watching

(Agencies)
Updated: 2009-04-19 13:49

Strong China

Wen highlighted China's relative strength in the face of the global financial crisis and told the audience of Asian government and business leaders that Beijing stood ready to support other countries through the difficult times.

"A series of economic stimulus measures adopted by China have shown initial results and there have been positive changes in economic performance, which has been better than expected," he said.

Leaders take a family photo before the opening plenary of Boao Forum for Asia (BFA) Annual Conference 2009 in Boao, a scenic town in south China’s Hainan Province, April 18, 2009. [Xinhua]

His wording was nearly identical to that at a State Council, or cabinet, meeting this week after China said its economy grew at 6.1 percent in the first quarter from a year earlier.

Related readings:  Premier Wen meets former US, Japanese leaders  Wen: Stimulus package plan paying off  Boao conference begins with focus on financial crisis  Boao Forum urges Asian countries to cooperate in financial crisis

While that was the weakest quarter in year-on-year terms since records began in 1992, analysts said it represented a rebound in quarter-on-quarter growth.

But Wen also said that China would still err on the side of the caution, sticking to its active fiscal policy and moderately loose monetary policy -- which, in practice, have meant a surge in government spending and bank lending.

"We would rather over-estimate the severity of the situation and fully consider difficulties in making longer-term preparation for bigger difficulties," he said.

Central bank governor Zhou also emphasised that, even though there were positive signs that the economy is starting to recover, China is still in the stage of struggling against the global economic slowdown and financial crisis.

"The situation of the crisis is changing constantly. We need to tweak our policies in line with the changing stage of the crisis," he said.

Liu Mingkang, chairman of the China Banking Regulatory Commission, added at Boao that he was cautiously optimistic about the economic outlook and thought banks had adequate provisions to cover any potential rebound in bad loans.

Zheng Xinli, a senior Communist Party adviser, told reporters in Boao that he thought the economy had already hit bottom and would start to pick up steam in the second quarter.

But asked if the government would be able to hit the 8-percent GDP growth target for the year, Zheng said: "I think it is not guaranteed."

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