Chinese premier urging economic stability

Chinese premier urging economic stability

Chinese premier Wen Jiabao has called for efforts to stabilise weakening exports amid signs the country’s economy is weakening despite stimulus efforts.

Mr Wen’s weekend comments during a visit to Guangdong province, an export centre in the south east, follow a wave of bankruptcies that has raised the threat of job losses and unrest.

That comes at a sensitive time as the Communist Party prepares to hand over power to younger leaders.

“The third quarter of the year is a critical period for China to realise the year’s export growth target and we should take targeted steps to stabilise growth,” Mr Wen said, according to the official Xinhua News Agency.

The report gave no indication of possible measures but Beijing previously has promised tax cuts and loans by state banks to help struggling exporters.

Export growth in July fell to just 1%, well below forecasts, from the previous month’s 11.3% growth due to weak demand in debt-crippled Europe, China’s biggest export market, and the United States, which is struggling with a sluggish recovery.

Beijing cut interest rates twice in June and is pumping money into the economy through higher spending on public works construction.

Authorities have resisted pressure for more aggressive stimulus after huge spending in response to the 2008 crisis fuelled inflation and a wasteful building boom.

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