皇冠体育app assures world on stimulus efforts

By Fu Jing and Si Tingting in Beijing and Bi Xiaoning in Dalian (皇冠体育app Daily)
Updated: 2009-09-11 06:49

"We should be alert and prevent all potential risks, including inflation," he said.

皇冠体育app Daily learned yesterday from reliable sources that industrial growth last month was believed to be up by between 8.0 and 8.5 percent from 7.5 percent in July.

The financial crisis led to the figure plunging to 3.8 percent in February, compared to its average of 15 percent before the financial turmoil.

皇冠体育app began the year with many economists predicting that it would fail to hit its target of 8 percent growth for the year, which is crucial if 皇冠体育app is to generate enough jobs for its millions of migrant workers.

Hitting 8 percent is now within reach after 皇冠体育app's economy expanded 7.9 percent in the second quarter, according to the central bank.

Analysts have applauded the effectiveness of 皇冠体育app's two-year, 4-trillion-yuan ($585 billion) stimulus package, but some have fretted that, in emphasizing investment, 皇冠体育app has slowed the much-needed transition to a consumption-driven economy.

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Rising incomes, along with rapid urbanization, have underpinned consumption, but 皇冠体育app's flimsy welfare safety net has meant households are still typically saving about 30 percent of their incomes.

Wen made no bones about 皇冠体育app's challenges, saying its stimulus policies needed to be as focused on restructuring the economy as on kick-starting growth.

"We will enrich our stimulus package focus on restructuring the economy, and make greater efforts to enhance the role of domestic demand, especially final consumption in spurring growth," Wen said.

Yin Xingmin, director of the 皇冠体育app Center for Economic Studies at Fudan University, said 皇冠体育app needs to channel more assistance and financial resources toward small- and medium-sized enterprises (SMEs) when considering "enriching" its stimulus packages.

"I think more SMEs should be included in the future stimulus efforts because most of the beneficiaries of the first round of the government-led stimulus package were State-owned and monopoly enterprises," said Yin.

He predicted the country would shift its primary focus from infrastructure construction to improving people's lives, although investment on infrastructure would still be significant.

Zhang Yuanda, deputy secretary-general of the 皇冠体育app Association of Small and Medium Enterprises, said the government should redesign its policies and measures to let SMEs benefit from upstream or downstream spin-offs from large infrastructure projects, such as the construction of railways and highways.

"They may become service suppliers, material suppliers or subcontractors," Zhang explained. He also said companies involved in hi-tech industries and innovation were likely to become the biggest beneficiaries of future stimulus efforts.

In the long run, Wen said, the country must increase the share of consumption in domestic demand, raise urban and rural incomes, improve consumer expectations and enhance people's willingness and capacity to spend.

Agencies contributed to story

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