China 'faces most difficult year': Chinese PM

Discussion in 'Economics' started by ByLoSellHi, Mar 4, 2009.

  1. 02:48 GMT, Thursday, 5 March 2009

    China 'faces most difficult year'

    Chinese Premier Wen Jiabao has said the coming year will be the most difficult the country has faced in modern times, due to the global economic crisis.

    China has enjoyed booming growth over the last 20 years

    Addressing parliament, Mr Wen said there would be a $500bn (£354bn) investment programme to stimulate the Chinese economy.

    He also declared an annual growth target of 8% and goals to boost consumption and raise consumer demand.

    His address opens the annual session of the National Peoples' Congress.

    It was unclear if the investment and spending programme referred to by Mr Wen would provide new funding, above the $586bn promised in November.

    The premier said he hoped to create nine million new jobs in the cities and increase local government spending budgets by almost 25%

    "In China, a developing country with a population of 1.3 billion, maintaining a certain growth rate for the economy is essential for expanding employment for urban and rural residents, increasing people's incomes and ensuring social stability," he said.

    Global impact

    Mr Wen was frank that China was suffering from the global financial crisis, and acknowledged the country lacked adequate social security provisions and health care.

    But he said he was satisfied that China would cope with the unprecedented challenges.

    "We are fully confident that we will overcome difficulties and challenges, and we have the conditions and ability to do so," Mr Wen told the 3,000 delegates attending the Communist Party's showpiece political event of the year.

    Share prices around the world jumped amid hopes that Mr Wen would announce an expansion to its economic stimulus plan.

    Earlier, China said it would increase military spending by 14.9% this year to 480.6bn yuan ($70.2bn).