China's leaders vow to keep stimulus, easy credit
APNews
Dec 07, 2009
China's leaders vowed Monday to keep economic stimulus and easy credit policies in place, while also improving the quality of the country's often chaotic economic growth.
An annual economic strategy meeting, presided over by President Hu Jintao and Premier Wen Jiabao, ended as expected with calls to ensure China's recovery from the global crisis remains stable, the official Xinhua News Agency said in dispatches posted on the government's main Web site.
Officials attending the three-day Central Economic Work Conference in Beijing agreed the global slowdown had added to the urgency for China to adjust its model of economic growth, which many economists say is excessively dominated by state-led industries at the expense of consumer demand.
China's economy is forecast to grow 8.3 percent this year, according to a government "bluebook" report on the economy issued Monday, after dipping to a low of 6.1 percent in the first quarter and since recovering to 8.9 percent in July-September.
But leaders are wary of pulling back from stimulus policies put in place late last year, given the weakness of key export markets in the U.S. and Europe, where unemployment remains high despite signs the worst may be past.
To counter the slump in exports, Beijing announced a 4 trillion yuan ($586 billion) stimulus package and urged state-controlled banks to lend lavishly to support a slew of public works projects. Monday's pronouncement also included calls to recover momentum in the export sector, while also boosting imports.
Now, however, Beijing's emphasis is shifting to promoting consumer spending and private investment _ drivers of domestic demand that are seen as crucial for future growth.
China's leaders have long acknowledged that the country must make those changes to help counter potentially destabilizing long-term problems _ environmental devastation, widening gaps between rich and poor and vulnerability to volatile global market trends.
While Chinese cities have prospered during the past three decades of rapid growth, incomes and services for the country's rural majority have lagged behind. To help close the huge gap between urban and rural living standards, Beijing's planners endorsed stepping up urbanization and gradually loosening residency restrictions on migration to provincial cities.
The impact of policies geared toward encouraging more consumer spending is already evident: as of November, tax cuts and subsidies helped boost car sales this year to over 12 million, Xinhua reported citing industry figures.
Retail sales have also remained buoyant, suggesting efforts to boost domestic demand are beginning to pay off.