China Says It Has An Ace Up It's Sleeve
Chinese Premier Wen Jiabao said Friday that his government was ready to put forward new stimulus package at any time should the financial crisis worsen.
He said there was sufficient "ammunition" to add to the 4 trillion yuan ($585.5bn) two-year stimulus package already announced.
In addition to the 4-trillion-yuan package, China will also cut taxes by 600 billion yuan, raise the old-age pension for retired workers, hike the salaries of 12 million teachers, increase farmers' income and provide more subsidies for them. The country also plans to spend 850 billion yuan on reforming the health care sector within three years, said Wen.
And on top of that "we have prepared enough (further) ammunition and we can launch new economic stimulus policies at any time."
Wen said China faces difficulties in achieving the goal of 8 percent economic growth in 2009, but it is possible with "considerable efforts".
China still retains an estimated nearly $2 trillion in reserves to resist the economic downturn, but it has hitherto been reluctant to tap this last resort, preferring to rely on trade surpluses. After reporting earlier in the week that February's trade surplus fell to $4.84 billion, down from $39.1 billion in January, these are now dwindling.
He said there was sufficient "ammunition" to add to the 4 trillion yuan ($585.5bn) two-year stimulus package already announced.
In addition to the 4-trillion-yuan package, China will also cut taxes by 600 billion yuan, raise the old-age pension for retired workers, hike the salaries of 12 million teachers, increase farmers' income and provide more subsidies for them. The country also plans to spend 850 billion yuan on reforming the health care sector within three years, said Wen.
And on top of that "we have prepared enough (further) ammunition and we can launch new economic stimulus policies at any time."
Wen said China faces difficulties in achieving the goal of 8 percent economic growth in 2009, but it is possible with "considerable efforts".
China still retains an estimated nearly $2 trillion in reserves to resist the economic downturn, but it has hitherto been reluctant to tap this last resort, preferring to rely on trade surpluses. After reporting earlier in the week that February's trade surplus fell to $4.84 billion, down from $39.1 billion in January, these are now dwindling.
