CHINA is ready to help Europe confront its debt crisis but the United States and other developed countries must “put their own house in order” and tackle their economic problems, Premier Wen Jiabao said yesterday.
At the opening of the World Economic Forum in Dalian, Wen said: “We have on many occasions expressed our readiness to extend a helping hand and a readiness to increase our investment in Europe.”
He said he repeated that pledge in a recent phone conservation with European Commission President Jose Barroso.
But Wen also struck a stern note with Europe and the US, telling them to tackle their debt problems and make changes to restore global financial stability and steady economic growth. “Countries must first put their own house in order,” Wen said.
Wen hinted at possible conditions on Chinese help, saying it wants Europe to take “bold steps,” including officially declaring China to be a free-market economy.
Wen said China believes European leaders should recognize China’s full market economy status before the 2016 deadline set by the World Trade Organization.
“To show one’s sincerity on this issue a few years ahead of that deadline is the way a friend treats another friend,” Wen said.
The premier expressed confidence in the US economy but called on the world’s largest economy to make sure global investors’ interests are protected.
China is now the United States’ biggest foreign creditor – holding an estimated US$1.6 trillion in government debt. Most of its US$3.2 trillion of foreign exchange reserves, the world’s largest, is also in US currency.
Chinese leaders worry the US might resort to moves in response to the crisis that could erode the value of the dollar and China’s American assets.
At home, China will maintain its “active and prudent” fiscal and monetary policies to curb inflation while forging ahead with structural reforms and boost domestic consumption to sustain long-term economic growth, Wen said. The country “will keep overall price levels basically stable and prevent big swings in economic growth,” he said.
China’s economy grew at a slower pace of 9.5 percent in the second quarter, largely a result of the government’s tightening policies and was within expectations, Wen said.
The world’s second largest economy, a position achieved at an annual growth of 10.5 percent in the past decade, is “turning to a direction” the government expects it to be in, with GDP slowing to 9.6 percent in the first half of the year while domestic consumption was now taking a bigger role, he noted.
“China is fully able and we have conditions and confidence in maintaining relatively fast economic growth,” he said, adding that the government needs to maintain a balance of stable growth, structural reforms and confining inflation.
Early year, China laid out its forecast for annual economic growth to be 8 percent in 2011, compared to last year’s 10.3 percent. Inflation is expected to be controlled within 4 percent, compared with last year’s 3.3 percent.
But the 4 percent target now seems unlikely given that the consumer price index, a main gauge of inflation, shot to 5.4 percent in the first six months and is expected to remain high for the rest of the year.
Source:Shanghai Daily