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Chinese Premier Wen Jiabao gave a blunt assessment of his peers’ performance on Wednesday, in a speech to attendees at the World Economic Forum. “This annual meeting has a special significance,” said Wen. “It’s our responsibility to send to the world a message of confidence, courage and hope.”
While Wen said that China has acted in an “active and responsible way in this crisis,” he had harsher words for other major economies. He blamed the turmoil on the “inappropriate macroeconomic policies of some economies”, as well as those countries’ acceptance of “prolonged low savings and high consumption” not to mention a “lack of self-discipline among financial institutions and rating agencies” and a failure of financial regulators to keep up with what Wen called “financial innovation”.
But Wen emphasized that China’s economy remains “on the track of fast and sustainable growth.” He noted that the “current crisis has inflicted a rather big impact on China’s economy”—from rising unemployment to downward pressure on growth. Even so, he said, “China’s economy is in good shape as a whole” with 9% GDP growth and stable consumer prices.
Wen elaborated on the government’s plan to kickstart China’s slower-growth economy with investments ranging from scientific research to teacher salaries. While Wen argued that the “global financial crisis is a challenge for the whole world,” he gave a clear message that his country will keep its own growth on track.
Wen’s speech was yet another sign of China’s growing assertiveness on the world stage. He spoke of the responsibility that the world’s major powers have towards vulnerable emerging markets, as well as the need for greater regulation.
In response to a question about China’s ability to continue growing, Wen noted that the growth rate had slowed in the fourth quarter to 6.8%. The country has a target of 8% for 2009—a goal that some have greeted with skepticism but which Wen said was “attainable through hard work.” In particular, he pointed to the country’s reform of its banking system, a “massive” savings rate and growing consumer demand. “There is still a gap between the rural areas and the cities,” he says. “No matter how many resources you have, you can never meet the demands there.”
On the subject of climate change, Wen said “we take the issue of climate change very seriously,” pointing to the country’s stepped-up regulations regarding emissions. China is also well ahead of its goals in reducing carbon dioxide emissions, he added. “The Chinese government knows its responsibilities full well,” he said.
And his message to the new U.S. Administration? “A peaceful and harmonious relationship will make both countries winners,” he said. “A contentious one will make us losers.” Continued cooperation will benefit not only the two countries, he added, but is critical to the entire world.
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