Chinas recovery is still not solid and
balanced, the countrys finance minister warned
today, as he pledged to keep in place the key elements of its
Writing exclusively in Emerging Markets, Xie Xuren
said Chinas proactive fiscal policy had helped the
economy continue to post strong rates of growth in the face of
a sharp contraction in demand for its exports.
Chinas macroeconomic policy and stimulus
package for coping with the international financial crisis are
effective, he said. Chinas economic growth is
contributing to the recovery of the world
But Xie acknowledged that the world economy still lacked a
firm foundation for a solid recovery. With
many uncertainties ahead, the process towards all-round
recovery will be slow and tortuous.
The recovery and stabilisation of the Chinese economy was
not yet steady, solid and balanced, Xie said,
adding that China would keep in place its proactive fiscal
policy and relatively low interest rates.
The Chinese stimulus package included a RMB (renminbi) 4
trillion two-year investment plan, tax cuts, higher subsidy
payments for low-income groups, and payouts to farmers and
rural workers worth RMB716 billion.
Looking ahead, Xie said the government would prevent any
sudden spike in inflation while continuing to find long-term
solutions to structural problems that were slowing
the sound development of the economy.
His comments followed briefings by senior Chinese officials
on the fringes of the G20 summit in Pittsburgh last month, in
which they gave commitments to keep stimulus measures in
Ma Xin, director general for international cooperation at
the National Development and Reform Commission, said that the
world economy was unbalanced and there were problems with the
economic models in both the US and China.
One of the problems is US growth based on high
consumption and low savings, and the Chinese model of low
consumption and high savings. It is a manifestation of the
imbalances in the world economy.
In his Emerging Markets article, Xie urged the
international community to make concerted efforts to
boost economic growth while actively promoting
balanced development internationally, without
specifying which countries needed to enact major policy
But speaking in Pittsburgh last week, Zheng Xiaosong,
director of international affairs at the finance ministry,
added there needed to be a wider rebalancing between the
developed and developing halves of the world.
You cant expect a few developing countries to
fill in the gap in domestic demand left by developed
countries, he said. I think that developed
countries should undertake greater responsibility for making
the world economy balanced and they should step up financial
and technical support for developing countries.
See Xie Xurens article: