Addressing participants on the first day of the World Economic Forum, Chinese Premier Wen Jiabao said: “From late last December, we have seen signs in the recovery of the Chinese economy; the signs are small ones but they give me hope.” He pointed to increases in bank lending, prices of industrial products and consumption.
He noted that the increase in bank loans was Rmb 900 billion in the first 20 days of 2009 compared to Rmb 700 billion in December and 400 billion Rmb in November. Prices of major industrial products have also picked up while the inventory of goods held up in ports in China has declined. In addition, despite falling commodity prices, growth in consumption was maintained at between 20% and 21%.
The premier revealed that at the start of the Lunar New Year, consumption rose 21% compared to the same period last year.
In his address, Wen admitted that the global financial crisis has a “rather big impact” on China’s economy. “We are facing severe challenges, including notably shrinking external demand, overcapacity in some sectors, difficult business conditions for enterprises, rising unemployment in urban areas and great downward pressure on economic growth,” he said.
However, he expressed confidence that with hard work, it should be able to meet its 2009 target of 8%. The Chinese economy grew 9% last year.
Wen blamed “inappropriate macroeconomic policies of some economies and their unsustainable model of development” for some of the causes behind the current crisis, and warned that trade protectionism would only worsen and prolong the crisis.
