Premier Wen says financial crisis not bottom out, impact spreading _English

Chinese Premier Wen Jiabao prepares to chat with Internet surfers on two state news portals in Beijing, China, Feb. 28, 2009. The two portals, the central government website (www.gov.cn) and the Xinhua News Agency website(www.xinhuanet.com), will jointly interview Wen, which will be shown live in both text and video. (Xinhua Photo)
Photo Gallery>>>

By Xinhua writers Wang Xiuqiong and Chang Ai'ling

BEIJING, Feb. 28 (Xinhua) -- The global financial crisis has not yet hit bottom and its impact is still spreading, said Chinese Premier Wen Jiabao during his first-ever online chat Saturday.

He also promised that China is "ready to take firmer and stronger actions whenever necessary."

Chinese Premier Wen Jiabao prepares to chat with Internet surfers on two state news portals in Beijing, China, Feb. 28, 2009. (Xinhua Photo)
Photo Gallery>>>

The major impact of the crisis is on the country's real economy instead of its financial sector, which after more than 10 years of reform, is relatively stable and healthy and capable of withstanding the crisis, he said.

Wen said China's east coastal areas were hit hard, where the economy is more export-dependent and labor intensive. The decline of international market demands also caused the unemployment of a great number of migrant workers.

China's gross domestic product (GDP) grew 9 percent year-on-year last year, the lowest since 2001, when an annual rate of 8.3 percent was recorded.

To cushion the blow of the international financial crisis, Wen said China announced a package of stimulus plans covering four aspects.

The first is the announcement a 4-trillion-yuan (588 billion U.S. dollars) economic stimulus and tax cuts. The second involves revitalizing ten key industries. The third is technical upgrading. The fourth is the building of a comprehensive social security network.

INITIAL RESULTS, BUT TEMPORARY

Wen said "the stimulus measures have shown initial effects and produced good results in certain areas and fields."

For example, the country has seen consecutive growth in credit supply, with new loans standing around 440 billion yuan in November, 770 billion yuan in December and 1.63 trillion yuan in January, Wen said.

He also cited figures on stronger retail sales and the rebound of power generation and use.

Consumption rose 18 percent year-on-year in January, while power generation in the Feb. 11-20 period increased 15 percent year-on-year, or up 13.2 percent from the first ten days of this month, he said.

"Some key indicators showed the economic situation has somewhat turned better," he said. "But those were just temporary indices and couldn't be fully compared with the past figures."

Wen said one indicator he valued most was power generation. "Starting from mid February, power generation and consumption have both resumed growth," he said.

"We must fully realize we are facing a long-term and arduous task," he added.

"We must strengthen confidence in the face of the crisis and be ready to take firmer and stronger actions when necessary."

CONCERNS ON EMPLOYMENT, INCOME GAP AND PROPERTY

Wen said migrant workers had been hit the hardest during the financial crisis.

About 20 million migrant workers in China had returned to the countryside from cities without jobs, said Chen Xiwen, director of the office of the central leading group on rural work, early this month.

Other government officials estimated the number at 12 million. Wen acknowledged the accurate number is yet to be counted.

He said migrant workers did not complain about the government and quietly returned to their hometowns, "some engaging in farming again, others still seeking jobs."

"I want to take the opportunity to extend my gratitude to our migrant workers," he said, adding they had made great contributions to the nation.

The government should encourage them to start their own business by offering tax stimulus and training opportunities, said Wen.

He also expressed deep concerns over the employment issue of college students and jobless urban families.

"Employment is not only related to one's livelihood but also one's dignity," said Wen.

China's State Council, or the cabinet, issued a notice on Feb. 10 urging governments at all levels to make every possible effort to expand employment.

When answering netizens' concerns over income discrepancies, Wen said narrowing the rich-poor gap could not be achieved "in a static state" and should be conducted alongside with economic development.

He acknowledged that China's social and economic development does have the problem of "imbalanced, discordant and unsustainable" growth.

The major problem is the imbalance between different regions, between the urban and rural areas and income imbalance, he said.

Meanwhile, Wen said he still has confidence in China's economy and the development of Chinese enterprises.

In a reply to complaints over the slumping stock market, he said he is confident about the capital market as its performance is decided by economic fundamentals and company profitability.

The government has the responsibility to establish an open, fair and transparent market environment and resolutely fight against illegal acts such as manipulating the market, he said.

Housing prices were among the most frequently asked questions raised by netizens during the chat. In response, Wen said he hopes to see a stable and healthy development of the country's real estate sector in the face of the global financial crisis.

China should strengthen management and regulation to keep housing prices and the scale of property construction "at a reasonable level", said Wen.

Housing prices have long been under fire in China, as consumers complain houses in large cities are too expensive to afford, giving developers unfair huge profits.

Wen said the government highly values the property industry as it concerns the life of ordinary people and directly affects the national economy.

The government has urged for stronger confidence in the real estate market while pledging more money and energy to meet the needs of low-income families, he said.

The government fund must be used properly to ensure house construction is economical, safe and of good quality, said Wen. He also noted the construction should save land and suit people's needs.

"Auditing and supervision should go along with all property projects," said Wen. "Problems must be dealt with whenever they emerge."

Property prices in 70 major Chinese cities fell 0.9 percent in January from a year earlier, a faster fall than the previous month.

In December, the figure saw the first year-on-year drop since the government started to release it in 2005.

China to narrow wealth gap in economic development

BEIJING, Feb. 28 (Xinhua) -- Chinese Premier Wen Jiabao said on Saturday that narrowing the gap between the rich and the poor could not be achieved "in a static state" and should be conducted alongside with the economic development.

Wen was in response to a question about the income gap while chatting with netizens at the central government website (http://english.gov.cn) and the Xinhua News Agency website (http://www.chinaview.cn ).

Premier Wen calls for joint efforts with Taiwan to fight financial crisis

BEIJING, Feb. 28 (Xinhua) -- Chinese Premier Wen Jiabao said here Saturday that he hoped the mainland and Taiwan could join hands to cope with the international financial crisis.

The mainland and Taiwan should set up an economic exchange and cooperation mechanism through negotiation, he said.

Chinese Premier confident in China's capital market

BEIJING, Feb. 28 (Xinhua) -- Chinese Premier Wen Jiabao said here Saturday he has confidence in China's capital market, noting the government has the responsibility to establish a fair, equitable and transparent market environment.

The performance of Chinese shares are decided by the economic fundamentals and company profitability, Wen told a netizen grieving over his huge losses in current sluggish stock market during an online chat.

Premier shows concern over jobless migrant workers, encouraging self-employment

Chinese Premier Wen Jiabao holds an online chat with netizens jointly hosted by the central government website and Xinhua website in Beijing, China, Feb. 28, 2009. (Xinhua/Li Xueren)
Photo Gallery>>>

BEIJING, Feb. 28 (Xinhua) -- Chinese Premier Wen Jiabao on Saturday showed his concern over the country's jobless migrant workers and other unemployed people and encouraged them to start self-employment.

Wen said he had been deeply concerned over the employment issue, including those of migrant workers, college graduates and jobless urban families.

Premier says private capital, businesses should be boosted to cope with financial crisis

BEIJING, Feb. 28 (Xinhua) -- Chinese Premier Wen Jiabao said Saturday private capital and priviately-owned businesses should be boosted to cope with the ongoing global financial crisis.

Wen made the remarks while hosting his first-ever online chat with the public.