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Tuesday, 23 September 2008

Turmoil to worsen: Wen

BEIJING - CHINESE Premier Wen Jiabao has warned the global economic slowdown and financial turmoil may get worse, pledging more flexible policies to maintain the country's growth, state media said on Monday.

'The international financial turmoil and the slowdown in the world's economy could worsen, and we cannot underestimate the impact of these changes on the national economy,' Mr Wen said, according to the Shanghai Securities News.

'We should improve the effectiveness, focus and flexibility of macro-control measures... to maintain the stability of the economy, the financial market and the securities market.'

It is particularly important to 'find the balance between maintaining steady and fast economic growth and curbing inflation", he told a meeting on Saturday with provincial and ministerial leaders.

China's economy expanded by 11.9 per cent last year, and cooling efforts have already seen growth slow to 10.1 per cent in the second quarter of this year.

The consumer price index dropped to 4.9 per cent in August, the fourth consecutive month of slowing inflation and well below the peak of 8.7 per cent in February, giving policy makers more room to focus on growth creating.

Both the central bank and the banking regulator issued statements earlier this month calling for more loans to boost the national economy, after Beijing in August raised this year's quota of new local-currency loans by five percent.

The finance ministry also unveiled 10 days ago a package of subsidies worth 3.51 billion yuan (S$730 million) to help small and medium-sized firms. -- AFP

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