Govt plan signals shift from growth-first policy

As the international financial meltdown looms large and China faces an increasing possibility of an economic downturn, the State Council, the Cabinet, last week made public an array of measures to stimulate domestic demand and concrete policies on their implementation.

The move symbolizes a new round of macro-control initiatives to be launched by the central government. To reduce the impact of the seismic international financial crisis on the Chinese economy to a minimum, the central government has to bring to an end its previous macroeconomic tool in pursuit of a sustained economic growth.

At the State Council meeting on Nov 5, Premier Wen Jiabao offered a 4 trillion yuan ($586 billion) stimulus package for the next two years and announced the government would resort to a proactive fiscal and a moderately loose monetary policy.