http://news.xinhuanet.com/english/2009-02/28/content_10917487.htm
BEIJING, Feb. 28 (Xinhua) -- The global financial crisis has not yet
hit bottom and its impact is still spreading, said Chinese Premier Wen
Jiabao during his first-ever online chat Saturday.
He also promised that China is "ready to take firmer and stronger
actions whenever necessary."
The major impact of the crisis is on the country's real economy
instead of its financial sector, which after more than 10 years of
reform, is relatively stable and healthy and capable of withstanding
the crisis, he said.
Wen said China's east coastal areas were hit hard, where the
economy is more export-dependent and labor intensive. The decline of
international market demands also caused the unemployment of a great
number of migrant workers.
China's gross domestic product (GDP) 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 a 4-trillion-yuan (588 billion U.S.
dollars) economic stimulus and tax cuts. The second involves
revitalizing ten key industries. The third is technical upgrading. The
fourth is the building of a comprehensive social security network.
INITIAL RESULTS, BUT TEMPORARY
Wen said "the stimulus measures have shown initial effects and
produced good results in certain areas and fields."
For example, the country has seen consecutive growth in credit
supply, with new loans standing around 440 billion yuan in November,
770 billion yuan in December and 1.63 trillion yuan in January, Wen
said.
He also cited figures on stronger retail sales and the rebound of
power generation and use.
Consumption rose 18 percent year-on-year in January, while power
generation in the Feb. 11-20 period increased 15 percent year-on-year,
or up 13.2 percent from the first ten days of this month, he said.
"Some key indicators showed the economic situation has somewhat
turned better," he said. "But those were just temporary indices and
couldn't be fully compared with the past figures."
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 realize we are facing a long-term and arduous
task," he added.
"We must strengthen confidence in the face of the crisis and be
ready to take firmer and stronger actions when necessary."
CONCERNS ON EMPLOYMENT, INCOME GAP AND PROPERTY
Wen said migrant workers had been hit the hardest during the
financial crisis.
About 20 million migrant workers in China had returned to the
countryside from cities without jobs, said Chen Xiwen, director of the
office of the central leading group on rural work, early this month.
Other government officials estimated the number at 12 million. Wen
acknowledged the accurate number is yet to be counted.
He said migrant workers did not complain about the government and
quietly returned to their hometowns, "some engaging in farming again,
others still seeking jobs."
"I want to take the opportunity to extend my gratitude to our
migrant workers," he said, adding they had made great contributions to
the nation.
The government should encourage them to start their own business
by offering tax stimulus and training opportunities, said Wen.
He also expressed deep concerns over the employment issue of
college students and jobless urban families.
"Employment is not only related to one's livelihood but also one's
dignity," said Wen.
China's State Council, or the cabinet, issued a notice on Feb. 10
urging governments at all levels to make every possible effort to
expand employment.
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.
Meanwhile, Wen said he still has confidence in China's economy and
the development of Chinese enterprises.
In a reply to complaints over the slumping stock market, he said
he is confident about the capital market as its performance is decided
by economic fundamentals and company profitability.
The government has the responsibility to establish an open, fair
and transparent market environment and resolutely fight against
illegal acts such as manipulating the market, he said.
Housing prices were among the most frequently asked questions
raised by netizens during the chat. In response, 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",
said Wen.
Housing prices have long been under fire in China, as consumers
complain houses in large cities are too expensive to afford, giving
developers unfair huge profits.
Wen said the government highly values the property industry as it
concerns the life of ordinary people and directly affects the national
economy.
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."
Property prices in 70 major Chinese cities fell 0.9 percent in
January from a year earlier, a faster fall than the previous month.
In December, the figure saw the first year-on-year drop since the
government started to release it in 2005.
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