”The global economy is recovering slowly, but the risks and uncertainty are growing, and they are causing storms on the financial markets. Economies, particularly the developed economies, are suffering from a slowdown in growth. The developing economies are suffering from inflation. This is a complex and problematic period. The crisis is an international challenge, and overcoming it will require cooperation. The previous crisis put our ability to cooperate to the test, and I feel that that still applies. The international community needs greater cooperation, while it forms a fairer and more just world order. The developed economies must take fiscal responsibility and deal with the debt problems," Chinese premier Wen Jiabao said today, at the opening session of the World Economic Forum 'Annual Meeting of the New Champions 2011' in the Chinese city of Dalian.
Commenting on the US economy, Wen said, "The US has to cope with three challenges: dealing with the debt, reducing the deficit, and increasing employment. The US is the most developed and the most important economy in the world. I have full confidence that it will overcome the difficulties and get its economy back on the track of healthy growth, and I have full confidence that the US will adopt the right policy, while safeguarding fiscal frameworks. I have proposed economic cooperation to President Obama. The US should open up to Chinese investment, and that will help it to create new jobs. The US should increase trade with China, and the US should also reduce the restrictions it has imposed on trade with us. I hope that we will be able to work together to deal with the problems." China is now the second largest economy in the world, and for several years has been the main contributor to global growth.
On the European economies, Wen said that they were suffering from the most severe difficulties, and that the most important challenge was currently to stop the spread of the debt crisis to the rest of Europe. “We have on many occasions expressed our readiness to extend a helping hand,” Wen declared. He noted that the sharp fluctuations in the dollar were causing sharp changes in commodity prices, leading to substantial inflationary pressures.
Wen said that the state of the Chinese economy was good. "China has adopted a policy of consumption-oriented growth. Inflation is under control, and the job creation process looks good. In the second quarter there was a slight fall in activity, but it stemmed from new regulation, and was in line with our expectations. We will maintain an expansionary fiscal policy and a responsible monetary policy that will enable us to control inflation," he said, and concluded, “I believe China’s economy can achieve longer term, better quality growth. This will be our new contribution to strong, sustainable global growth. We sincerely welcome all the new foreign companies interested in investing in China."
Earlier in his remarks, Wen talked about the new five-year plan and recent economic developments in China. "China today is an open, market economy, and it contributes to global growth. The current era demands the continued peaceful development of China," he said, adding, "China's growth in unbalanced."
On the five-year plan that many believe will change the face of the global economy, Wen said, "China will continue to expand its domestic demand-oriented strategy, which is critical for sustainable growth. About 20% of the world's population is in China, and so expanding private consumption and the quality of life of the Chinese will generate formidable domestic demand."
From an Israeli point of view, the most interesting point measure in the five-year plan will be technological improvement through massive investment in research and development. "We want to improve China's human capital in order to reinforce China's development and competitiveness, including in technology. This will be though a renewed technology-oriented education program. We don’t just want a big China, but a strong China, and therefore we must be innovation oriented," the Chinese premier said, and stated an annual growth target of 7% for per capita income. In the same context, Wen said that China would continue to promote environmental legislation and political and regulatory reforms, and would introduce changes to improve the atmosphere for foreign investment, including greater transparency.
Published by Globes [online], Israel business news - www.globes-online.com - on September 14, 2011
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