Full text of Chinese Premier Wen Jiabao's speech at Summer Davos 2010
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We have implemented a pro-active fiscal policy and a moderately easy monetary policy with an unprecedented intensity, and at the same time successfully kept fiscal and financial risks under control. In the past two years, China's budget deficit and government debt have been kept below 3 percent and around 20 percent of the GDP respectively. The asset quality of banks and their ability to fend off risks have improved. The capital adequacy ratio and NPL ratio now stand at 11.1 percent and 2.8 percent respectively, both in the safe territory. This being said, we are keenly aware of the latent fiscal and financial risks, especially the debt risks of the financing platforms of local governments. This is not a new problem, yet the risks have somewhat increased in recent months. We have formulated the measures to strengthen the regulation of those financing platforms and implementation is well underway. In the face of the sudden international financial crisis, the extraordinary policy measures that we have adopted are necessary and these measure have played a positive role. Yet some negative impacts are hardly avoidable. What's important is to keep those negative impacts within a scope that we can manage. In this sense, we have done a good job in balancing the need of promoting positive effects with that of reducing negative ones. Taken as a whole, the results of our stimulus package are good.
By implementing the stimulus package, we have not only maintained China's economic stability and relatively fast economic growth, but also made important contribution to the world economic recovery. At a time of negative economic growth for major developed countries, the fast economic stabilization and rapid economic growth of China and other major developing countries greatly boosted international confidence in overcoming the financial crisis and provided a strong impetus to the world economic growth. In 2009, China's imports totaled 1.0056 trillion U.S. dollars, and its trade surplus dropped by 102 billion U.S. dollars. In the first seven months of this year, China's imports reached 766.6 billion U.S. dollars, a surge of 47.2 percent year on year. This shows that China's economic growth has provided major development opportunities for the multinationals and created huge demand for major economies and neighboring countries. It has become an important engine for the world economic recovery.
To sum up, from both the near and long-term perspective and in both the real economy and the fiscal and financial field, our stimulus package, policies and measures are timely, forceful, effective and suited to China's realities. They are the right choice that will bring benefits to both the current and future generations and serve the interests of the world. China's economy is now in good shape, featuring fast growth, structural improvement, rising employment and basic price stability. Growth of some major economic indicators moderated in the second quarter of this year. This is mainly due to the high level of the base figures and our proactive macro-control measures. We have the confidence, conditions and capabilities to maintain steady and fast economic development. In exercising macro-control, we will take it as a central task to appropriately handle the relationship between maintaining steady and rapid economic development, adjusting the economic structure and managing inflation expectations, and we will take policy stability as the main focus. While maintaining the continuity and stability of our policies, we will make macro-control measures more targeted and flexible to consolidate and strengthen the sound momentum of development.
Ladies and Gentlemen,
The underlying impact of the international financial crisis has not been fully eliminated, the world economy has yet to enter a benign cycle of steady growth, and systemic and structural risks are still prominent. We need to cement and build on what we have achieved in countering the financial crisis. We need to take into consideration both the immediate needs and long-term development and, while continuing to energize the recovery, create conditions for sustainable development through structural reform. This is a common task for all countries. In case of China, there is a lack of balance, coordination and sustainability in the economic development. The main problems include the unreasonable economic structure, weak capabilities for scientific and technological innovation, rising resources and environmental constraints, uneven urban-rural and regional development and lack of coordination between economic and social development. Some of these problems are inescapable in our current stage of economic development, and some are caused by inadequate institutional reform. To effectively address these deep-seated and structural problems, we will take an integrated approach that balances near-term macro control with long-term development and advances reform and opening-up in the broader context of scientific development. Only in this way can the Chinese economy achieve greater and more sustainable development. For now and in the time to come, we will focus our efforts in the following fields.
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