Mon, Jul 16, 2012 - Page 5 News List

China’s sluggish economy alarm

AFP, BEIJING

A man begs on a street in Shanghai on May 12.

Photo: AFP

Chinese Premier Wen Jiabao (溫家寶) warned yesterday that his nation’s economic rebound was not stable and the world’s second-largest economy faced hardships ahead, state media reported.

During an inspection tour of southwest China’s Sichuan Province, Wen called for greater efforts to strengthen the vitality and dynamism of economic growth, Xinhua news agency said.

“The economic growth rate is still within the government target range set early this year and stabilisation policies are working,” Xinhua quoted Wen as saying.

China’s “economic rebound is not yet stable and economic hardship may continue for a period of time,” he said.

China’s economy expanded during the second quarter at its slowest pace in more than three years as dire problems overseas started to hit home, according to official data released on Friday.

The world’s second-largest economy grew 7.6 percent in the second quarter year-on-year, the National Bureau of Statistics said, the weakest since 6.6 percent during the depths of the global financial crisis at the start of 2009.

The weak second-quarter expansion dragged down growth to 7.8 percent for the first half of the year, a period which saw the debt crisis in Europe deepen and the US economy struggle.

The Chinese government earlier this month took the rare step of slashing interest rates for the second time in a month. That followed three cuts since December last year in banks’ reserve requirements, or the amount of money they must keep on hand.

Such cuts are meant to free up funds for lending and thus boost the economy.

Chinese leaders have vowed to take further measures. Wen last week called stabilizing economic growth the government’s “top priority.”

Decelerating growth in China is also casting a further cloud over the broader global economy, which is continuing to suffer the effects of the 2008-2009 financial crisis.

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