World Crisis Online

By CSC staff, Shanghai While China’s economic growth in the year’s first half reached 7.1%, and officials are increasingly confident about reaching the 8% annual growth goal this year, there is a growing concern over bubbling stock and real estate markets, and the central bank is warning of future inflation pressures. The State Council, however, has decided it should at present continue to implement stimulative fiscal and monetary policies.
On visiting the Yangtze River Delta, Premier Wen Jiabao pointed out that the Chinese economy was rebounding, and that the central government was emphasizing stability and the continuity of macroeconomic policy and would stick to active fiscal and moderate monetary policies, as China still faces many challenges and difficulties.
First, he said, uncertainty still looms over the future of the global economy, and external demand is still under big pressure.
Second, room for independent economic growth is insufficient. Both firms and their industries still confront operational difficulties, and production surpluses are very serious. Great effort is still needed to adjust the economic structure.
Third, the effort to expand internal demand is restrained by many factors, and time is needed for long-term policies to take effect.
Prime Minister Wen said the trend of the macro-policy would not change. He said the government must maintain the comparatively rapid economic growth and adjust economic structure at the same time to and make economic development more sustainable and competitive.
“I have been thinking of the cause of the financial crisis these days. From a long-term perspective, we must rely on science & technology and talent, without which our country will lack competitiveness. So we must consider where China’s new growth points lie,” Wen said on a visit to an integrated circuit production center in Wuxi.
Over 60 companies occupy Wuxi’s center. After his visit, Wen said to researchers that high and new technology was necessary to the sustainable development, and it requires three conditions: key technology and high-end products; demand from domestic and international markets; and new technology, even revolutionary technology, which only talent can supply.
Vice-Premier Li Keqiang echoed Wen, on a visit to Heilongjiang Province, a traditional industrial center of China, that the government should maintain continuity and stability of the macroeconomic policy, make efforts to adjust the structure, promote reform, and improve people’s well-being while guaranteeing economic growth, and accelerate systematic and technical innovation so as to create new growth points and reinforce the potential for future economic development.