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2009-01-11 | All chapters

China sees 'success' in offsetting crisis
Patti Waldmeir, Financial Times, 11th January 2009

Wen Jiabao declared China's efforts to offset the effect of the global economic slowdown an "initial success" on Sunday as the economy performed "better than expected" last month.

The premier's hints that the country's economy might not be locked in a downward spiral will be seen as good news in the rest of the world, where Chinese growth is viewed as a potential palliative for the global recession.

Speaking during a three-day visit to industrial regions in eastern China, Mr Wen said sales at some companies had begun to rebound, stockpiles were falling and electricity consumption was rising.

"We have achieved initial success from the policies we adopted to counter the financial crisis," the premier said, according to China National Radio.

Beijing announced an economic stimulus package of Rmb4,000bn ($585bn, €434bn, £386bn) in November, heavily weighted towards construction and heavy industry. It was not expected to improve economic growth until the middle of this year but some industries, such as steel, have already shown more confidence since the stimulus package was announced. Scores of Chinese steelmakers have resumed production in the hope that it will lead to a sustained recovery in steel prices.

Mr Wen vowed that the central government would take other measures, including large investments, to combat the crisis before the legislature’s annual meeting in early March, according to a speech published separately. The measures would include accelerated investment worth a total of Rmb600bn in six projects, originally approved as scientific and technological investments over the medium- and long-term.

Chinese exports fell 2.8 per cent in December, at least one percentage point less than expected, Dow Jones reported on Saturday. Official figures have not yet been released. Imports also fell sharply Dow Jones reported, indicating that China is suffering not only from the global economic slowdown but also from weakness in local demand, which Beijing had hoped would help sustain economic growth and restrain unemployment.

State media also reported that China plans to spend Rmb9bn before the Lunar New Year on January 26 to help those worst affected by the global economic crisis. Some 74m people will receive one-off payments of Rmb100 for those living in the countryside and RMB150 for those living in urban areas.

Source: http://www.ft.com/cms/s/0/99953da2-e00e-11dd-9ee9-000077b07658.html