Wen urges dynamism of economic growth

CHENGDU - Premier Wen Jiabao has called for greater efforts to strengthen the vitality and dynamism of economic growth.

Speaking during an inspection tour of southwest China's Sichuan province from Friday to Sunday, Wen said the economy is running at a slower but more stable pace.

"The economic growth rate is still within the government target range set early this year, and stabilization policies are working, " Wen said.

In March this year, the nation pared its gross domestic product (GDP) growth target for 2012 to 7.5 percent from the previous 8 percent, in the face of a persistent slump in the United States and spreading debt woes in the European Union.

Dragged down by lackluster external demand and government efforts to cool the property sector, the country's GDP growth slowed to a three-year low of 7.6 percent in the second quarter.

Wen said China's economic fundamentals remain sound and the country still enjoys huge growth potential, citing the bumper summer harvest, cooling inflation and rising incomes.

However, the country's economic rebound is not yet stable and economic hardship may continue for a period of time, the premier warned at a conference on Saturday in Chengdu city attended by provincial officials from Henan, Hunan, Guangxi, Sichuan and Shaanxi.

In the second half of the year, the government will "increase efforts to preset and fine-tune its policies, and make policies more targeted, foresighted and effective," Wen said.

The government will combine stabilizing investment with implementing mid- to long-term development plans, promoting urbanization and agricultural modernization, improving people's livelihoods, upgrading industries, exploring emerging markets and encouraging private investment, Wen said.

More efforts must be done to deepen reforms of income distribution, raise people's incomes, improve the social networks and create more jobs especially for college graduates, he added.

During a meeting with local entrepreneurs, Wen urged the business people to step up research and development to cope with shrinking exports and rising production costs.

Liu Qiongying, president of Aiminer Leather Products Co., said the company's products are highly value-added and 95 percent are made for exports. But the company faces difficulties because of rising labor and raw material costs.

Enterprises should bring their initiatives into full play and strengthen research and development to upgrade their products, Wen said, pledging to provide preferential financial and tax policies.

Chen Jinbin, head of the Sichuan branch of Kerry Eas Logistics Co., said his company's revenues rose 31 percent year-on-year to 8 billion yuan (1.27 billion U.S. dollars) in the first half.

Wen said the government should pay more attention to the logistics industry, as "smooth logistics can boost consumption, which will then help enlarge production."

The government encourages logistics companies to grow strong through mergers and acquisitions and by relying on information technology, he said.

During a visit to Chengdu Rainbow Appliance Group Co., Wen was pleased to know that the company's first-half sales and profits increased 14 percent and 19 percent, respectively.

"The company not only provided over 1,400 jobs for local people, but also created market demand. I hope there will be an increase in the number of companies like this one," Wen said.

Some entrepreneurs from private companies said they hope the government will give more support to proprietary brands in government procurement and reduce tax burdens on mid- to small-sized high-tech companies.

Wen said the government will create a fair market environment for private companies, encourage them to participate in major scientific and technological projects and increase support to small and micro private firms.

Private companies have vitality, great adaptability and growth potential. They will achieve greater development with government policy support, Wen noted.