China sees signs that economic growth is recovering but is watching closely to determine whether it needs to expand its huge stimulus effort as global conditions worsen, top economic officials said yesterday.
“We have seen some positive signs, including recovery of export growth,” Zhang Ping (張平), the chairman of the country’s planning body, the National Development and Reform Commission, said at a news conference. “It really depends on the changing situation to determine whether we need additional investment.”
Zhang and central bank Governor Zhou Xiaochuan (周小川) said positive data showed Beijing’s policies were working. Zhou repeated Premier Wen Jiabao’s (溫家寶) statement on Thursday at the opening of the legislature that China can achieve 8 percent growth this year as Beijing steps up spending to create jobs and boost exports.
World markets fell on Thursday after Wen failed to mention any expansion of the 4 trillion yuan (US$586 billion) stimulus plan. Along with worries about the financial health of big US banks and General Motors Corp that sent the Dow Jones Industrial Average down more than 4 percent, Tokyo stocks were down 3.5 percent in afternoon trade yesterday.
Zhang said 580 billion yuan of the stimulus would be spent helping companies improve technology and energy efficiency.
“We are not looking only at immediate difficulties and challenges but also considering how to provide a solid basis for future development,” he said. “Having stood the test of this crisis, the quality and competitiveness of the Chinese economy will reach a new high.”
Zhang’s comments were the most detailed explanation yet of how Beijing plans to spend its stimulus. The package was announced in November but companies and investors have received little information, prompting complaints by China’s public and warnings that secrecy would increase the potential for corruption and waste.
The government will spend 370 billion yuan on roads, power supplies and other rural infrastructure; 1.5 trillion yuan on highways and railways and 150 billion yuan on education, health and cultural facilities such as museums, Zhang said. Some 1 trillion yuan will go into reconstruction efforts for last year’s devastating earthquake.
The stimulus is meant to reduce reliance on exports by boosting domestic consumption.
Zhang said Beijing has assigned 24 teams of auditors to make sure no money is misused in a system where thousands are punished each year for embezzlement and other abuses.
“We have not discovered that any money has been misused,” Zhang said.
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