POLICY COMMITMENT: Premier Wen Jiabao says China will stick to pro-growth economic policies in 2010(YAO DAWEI)

In an exclusive interview with Xinhua News Agency in Beijing on December 27, 2009, Chinese Premier Wen Jiabao shared his visions of the current economic situation in China and the government's economic policy orientations for 2010. Here are the highlights of the interview.

Addressing the Economic Downturn

"We have stabilized economic growth and employment and maintained social stability over the past year," Wen said.

However, it was too early to assess the performance as the global financial crisis was not over yet and much more work was required, he said.

"The financial crisis is not yet over, but our work so far indicates that our measures are effective. People across the country should be proud of them," Wen said.

Economic Policies

China will stick to its proactive fiscal policy and appropriately accommodative monetary policy to buoy the economy in 2010, as there are still many uncertainties ahead at home and abroad, Wen said.

"To withdraw macroeconomic policies too early is likely to ruin previous efforts and reverse economic development," he said.

Wen said China's economy could have been better, "if our bank lending had been more balanced, better structured and not on such a large scale."

Overcapacity Worries

The problem of industrial overcapacity in China is not related at all to the Central Government's investment in the 4-trillion-yuan ($586 billion) stimulus package.

"I can guarantee the 1.18-trillion-yuan ($172.8) investment the Central Government planned for 2009-10 has not been and will not be spent on any industrial project," Wen said.

"To resolve the problem of overcapacity, the most important thing is to take economic, environmental, legal and, if necessary, administrative measures to eliminate outdated capacity and, in particular, restrict the development of high-energy-consuming and polluting industries with excess capacity."

Appreciation Pressure on Yuan

China will not yield to foreign pressure for the appreciation of its currency yuan, or renminbi, in any form.

"A stable Chinese currency is good for the international community," Wen said. The moves of some countries in demanding the yuan's appreciation while practicing trade protectionism against China are, in essence, aimed at checking China's development.

Prevention of Inflation

Preventing inflation would ensure a stable environment for economic development and protect the interests of the people. Maintaining stable and rapid economic growth is a top economic priority for 2010.

"China is not facing inflation issues at the moment...but we should foresee its possibility and maintain consumer prices in a reasonable range, especially in a country with imbalanced income distribution and a widening income gap," Wen said.

Soaring Property Prices

As the property market recovered rapidly in 2009, housing prices in some cities rose too fast, Wen said. The matter demands great attention from the Central Government.

Wen said he promises to maintain order in China's property market while cracking down on illegal activities that have driven up housing prices, including the hoarding of land, driving up prices and delaying sales for bigger profits.

Improving Living Standards

China will steadily advance the reform of its decades-old household registration system, in a bid to ensure migrant workers have equal rights with city dwellers.

"Farmers-turned-workers living in cities who have a stable income are a priority. Further, the government will make policies to encourage migrant workers to settle in small and medium-sized towns and cities, as big cities have limited capacities," Wen said.

Role of Science & Technology

China should rely on science and technology to change its growth pattern, Wen said.

"It is a structural problem for China's economy, which is still unbalanced, uncoordinated and unsustainable."

Wen said China should continue to fully play up its advantage in the manufacturing sector, while striving to develop key areas related to the environment and living standards, such as the Internet, green economy, low-carbon economy, environmental protection technology and biomedicine.

Hope for the New Year

Wen urged the Chinese people to become aware of possible hardships and crises during 2010, and to work hard for a more promising future.

"China has a great deal of hope in its future," he said, although the road ahead will be bumpy.

"The Chinese people have gone through so many disasters but it is the eminent tradition of our nation to be independent, indomitable and fearless," he said.

(Source: Xinhua News Agency)