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Economic recovery will take some time, premier warns

(China Daily/Agencies)
Updated: 2009-08-25 07:59

Premier Wen Jiabao has warned that the country still faces uncertainties despite signs of economic recovery, saying the government will maintain its macro economic policies.

In a statement on the government's website, www.gov.cn, Wen said Beijing will ensure a sustainable flow of credit and a "reasonably sufficient" provision of liquidity to support an economy that is facing fresh difficulties.

"There are still a lot of unstable and uncertain factors ahead and the economic situation ahead is still very grave, although both the world economy and the national economy are now making positive changes," Wen said during an inspection tour to Zhejiang province from Saturday to Monday.

China has shown increasingly positive signs of economic performance, but the country's economic recovery is still uncertain, Wen said.

"We can clearly see that the foundations of the recovery are not stable, not solidified and not balanced. We cannot be blindly optimistic," he said.

The effects of some government measures might fade, while others will take time to show results, Wen said, who gave no other details of potential problems.

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Beijing will stick to policies meant to boost domestic demand, maintain easy credit and promote efficiency, the statement said. The government is in the midst of a two-year, 4 trillion yuan ($586 billion) stimulus plan that is meant to insulate China from the global downturn by boosting domestic consumption.

Wen's comments echoed his repeated recent warnings against complacency and assurances that Beijing's stimulus spending and easy credit would continue. But they clashed with increasing optimism from financial analysts who say China is emerging from its economic slump.

China's economic growth accelerated in the latest quarter amid Beijing's huge stimulus spending but authorities have called for continued vigilance. They say weak corporate profits show that a recovery is not fully established.

During his visit to the coastal province, Wen inspected some private firms, a movement to boost the confidence of small and medium-sized private companies.

President Hu Jintao said on July 23 that the country would maintain its macro economic policies, a week after the country reported a rebound in growth in the second quarter.