Official: China can meet 8 percent growth target
China is confident it can meet its growth target of 8 percent this year though "downward pressure" from the global economic crisis is growing, the deputy chairman of its planning agency said Friday.
The comments in a nationally televised news conference were Beijing's latest effort to reassure uneasy consumers and companies and encourage them to keep spending -- a key part of its multibillion-dollar plan to pull the economy out of its slump.
"We have set a growth rate of about 8 percent for 2009. I think we have the conditions, the possibility and the confidence to deliver that," said Liu Tienan, deputy chairman of the Cabinet's National Development and Reform Commission said. "Despite the downward pressure on the Chinese economy since the fourth quarter of last year, we have nonetheless seen some signs of recovery compared with previous months."
China is one of the only major economies still growing, though it has slowed. Among Asian economies, Japan, South Korea, Thailand, Taiwan and Singapore are all contracting.
Liu did not answer a question about whether the economy has slowed further since the final quarter of 2008, when growth fell to a seven-year low of 6.8 percent compared with the same time a year earlier. In 2007, China grew a blistering 13 percent.
Officials have issued a stream of assurances in an effort to buoy consumer spending and corporate investment. Analysts say such private spending will be key to the success of Beijing's 4 trillion yuan ($586 billion) plan to reduce reliance on plunging exports by boosting domestic demand.
The stimulus calls for spurring domestic consumption by pumping into the economy through higher spending on building highways and other public works. State companies have been ordered to speed up plans to build power plants and other facilities.
"All of this will generate tremendous demand for equipment, and this in turn will generate demand for raw materials," Liu said. However, he acknowledged, "as foreign demand shrinks, this puts great pressure on domestic demand."
Officials defended China's efforts to stimulate exports by boosting rebates of value-added taxes on steel, textiles and other goods. Those moves have caused unease among China's trading partners, which see them as at odds with the spirit of free trade, though diplomats say they do not appear to violate Beijing's formal commitments.
Liu said that many of the steps simply rolled back rebate reductions or export taxes imposed earlier to discourage sales of goods that were deemed too dirty or energy-intensive.
"I think the measures we have adopted this time are both necessary and consistent with international practice," he said.
Liu also defended a multibillion-dollar string of Chinese deals to gain access to Russian and Brazilian oil and Australian iron ore, including Aluminum Corp. of China's $19.5 billion investment in Rio Tinto Group. He said the deals benefited both sides and were purely commercial.
The surge has stirred anxiety in some countries that China is carrying out a government-coordinated effort to lock up access to resources. Some Australian lawmakers want large Chinese investments in mineral companies to be rejected under restrictions on foreign ownership.
"The cooperation carried out by these enterprises is mutually beneficial and win-win in nature," Liu said. "The decisions were made by the enterprises themselves."