Archive for the ‘macroeconomics’ Category

China vows stable growth in face of global turmoil

October 12, 2008

BEIJING (Reuters) – China will maintain flexible and prudent macro-economic policies and seek to expand domestic demand in the face of a grim international economic environment, the country’s ruling Communist Party said on Sunday.

A meeting of the Party’s Central Committee warned that the global economy was slowing, threatening to dent Chinese growth, and said the country would be turning to home markets to cushion the fallout.

In this photo released by China's Xinhua News Agency, all nine ...
In this photo released by China’s Xinhua News Agency, all nine members of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee, including President Hu Jintao, center, and Premier Wen Jiabao, fourth left, attend the third Plenary Session of the 17th CPC Central Committee on Sunday, Oct. 12, 2008 in Beijing. China’s ruling Communist Party said Sunday it aims to double the income of the country’s farmers in two decades amid efforts to boost domestic demand to counter the effects of the faltering global economy. The move is part of an agricultural reform and development plan approved by the party’s Central Committee at the end of a four-day meeting, the official Xinhua News Agency said. From left are, Zhou Yongkang, Li Keqiang, Li Changchun, Wen, Hu, Wu Bangguo, Jia Qinglin, Xi Jinping and He Guoqiang.(AP Photo/Xinhua, Li Xueren)

“There are also some pronounced contradictions and problems in domestic economic activity. We must enhance our sense of peril and actively respond to challenges,” according to a communique issued after the meeting by the official Xinhua news agency.

At the same time, it said the party’s top leaders had stressed that the overall state of the Chinese economy was good.

Growth had remained quite fast, and the financial sector was operating in a stable, healthy way.

“The fundamental conditions of our country’s economic development have not changed,” the communique said.

Thanks to capital controls and an underdeveloped, inward-looking banking system, China has been largely sheltered from the global credit crisis.

But economists and policy makers are braced for second-round effects as slowing exports hit manufacturers and cause loans on the books of the nation’s banks to turn sour.

“The most important thing is to handle our country’s own affairs well,” the communique said.

It said the government would “maintain economic stability, financial stability, and stability of the capital markets … continuing to encourage economic and social development that is both healthy and rapid.”

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