China faces tough year ahead
BEIJING: China faces a difficult
year as it works to maintain economic growth and
spur development, but it will not be bullied into changing its exchange rate policy, Premier Wen Jiabao said on Sunday.
In a wide-ranging press conference at the end of China’s annual session of parliament, Wen said Beijing was not ready to withdraw stimulus measures put in place in late 2008 to pull the world’s third-largest economy out of crisis. He also warned Beijing would not cede to foreign
pressure to boost the value of its currency, nor would it allow the United States to push it too far on the thorny issues of Taiwan and Tibet. “This year is going to be the most complicated year for
the economy,” Wen told hundreds of reporters gathered at the Great Hall of the People for his only formal press conference of the year. “We will maintain the continuity and stability of our macroeconomic policies,” he said, adding that as circumstances change, Beijing would make every effort to make its policies “more flexible”.
The Communist government launched a $586-billion stimulus package in late 2008 to boost domestic demand as a way to
make up for falling
exports, which plummeted when key US and
European markets tumbled into recession. Beijing has since returned to double-digit growth - a blistering 10.7 per cent in the fourth quarter of 2009 - prompting fears of economic overheating and asset bubbles that could later lead to a bust.
Chinese consumer prices rose for the fourth straight month in February while new lending slowed sharply, official data showed last week - leading analysts to predict Beijing could wait a bit longer before implementing tough tightening measures.
Wen said that for now, the focus remained on consolidating China’s recovery.
“The economic situation remains complicated... even if the world economy were to pick up, the main global economic problems have not completely disappeared,” he said. China’s trade partners have repeatedly called for Beijing to allow the yuan to appreciate, saying it is kept artificially low to boost exports.
US President Barack Obama last week called on China to adopt a “market-oriented” exchange rate policy, which he said would make an “essential contribution” to rebalancing the world economy after the crisis. But Wen rejected those calls.