May 23, 2012 / 11:18 AM / 6 years ago

China says to step up policy fine-tuning to spur growth

BEIJING (Reuters) - China will step up policy fine-tuning to support the economy, Premier Wen Jiabao said on Wednesday, the latest signal that Beijing will take further action to fight slowing growth.

China's Premier Wen Jiabao stands in front of a Chinese national flag as he attends a joint news conference of the fifth trilateral summit among China, South Korea and Japan at the Great Hall of the People in Beijing, May 13, 2012. REUTERS/Petar Kujundzic

The latest Reuters poll shows that private sector economists expect China’s growth to ease to 7.9 percent in the second-quarter from an 8.1 percent annual rate in Q1. They forecast full-year growth of 8.2 percent.

The government would bring forward key investment projects laid out under the 12th five-year plan (2011-15) and launch other projects that could promote development of the economy.

“As for projects that have got government approval, such as in the fields of railway, energy-saving, rural and western regional infrastructure, education and healthcare, we should speed up the pace of construction,” Wen said at a regular cabinet meeting.

The state-backed China Securities Journal said on Tuesday that China would fast-track approvals for infrastructure investment, after data last month showed the pace of investment in areas such as roads, bridges and property was at its weakest in nearly a decade.

“China’s domestic economy is still facing some protruding problems and particularly the downward economic pressure is increasing,” Wen said.

“We should put economic growth at a more important position and increase the strength of policy fine-tuning to make it more targeted, flexible and forward-looking,” said Wen in remarks were published on the central government’s website,

Wen reiterated Beijing’s tightening policy in the property sector, which has just started showing some signs of cooling.

The central bank has cut the banks’ reserve requirement ratio — its preferred policy tool — three times since November to crank up bank lending and support the economy.

Chinese leaders have pledged to keep a proactive fiscal policy, but few analysts expect Beijing to unveil stimulus measures that come anywhere near the mammoth 4 trillion yuan spending plan launched during the 2008-2009 financial crisis.

Reporting by Kevin Yao, Aileen Wang and Koh Gui Qing; Editing by Nick Macfie

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