Premier Wen Expresses Confidence in Weathering Crisis

Chinese Premier Wen Jiabao said Sunday that he is confident China will weather the global economic crisis, calling for cooperation to tackle the financial storm.

The confidence comes from a correct judgment of the current situation, Wen said in an interview with the Financial Times.

In addition, he said China has confidence because of its stable and sound financial market, broad market potential and leeway to deal with the crisis.

Most importantly, Wen told the newspaper, China has confidence that it will weather the financial storm because of the government's swift and powerful measures to decisively deal with the situation.

Wen also said he is confident that China will maintain economic growth at "about 8 percent" this year.

"China's GDP was at 9 percent as a whole last year, but in the fourth quarter of 2008 we also had a big decline and it fell to 6.8 percent," he said. "Our economy is under increased downward pressures and all this means that we are now facing great difficulties."

However, the premier said he still feels confident under such circumstances, adding that the belief in growth at "about 8 percent" is dependent on four factors, including correct, effective policy measures.

All of the measures the government has adopted are aimed at boosting consumer spending and stimulating the real economy on which the crisis has landed its major impact, Wen said.

"We must take forceful steps. Under special circumstances, necessary and extraordinary measures are required," he said. "We should not be restricted by conventions. Success or failure depends on the pace and intensity of those measures."

Wen also rejected allegations that China is manipulating its currency exchange rate, vowing to keep the Renminbi at a reasonable and balanced level.

"To allege that China is manipulating its currency exchange rate is completely unfounded," he said.

He said that in the second half of 2005, China began to conduct reforms in its exchange rate regime.

"With more than three years of the reform, the Renminbi has appreciated by 21 percent in actual terms against the U.S. dollar and 12 percent against the euro," Wen said.

To maintain the basic stability of the Chinese RMB is in the interest of not only China, but also the world economy, the premier said.

"It is in the interests of the efforts of the international community in overcoming the financial crisis," Wen said.

Asked if China's 2-trillion-dollar reserve should be partly to blame for the financial crisis, Wen said such a view is "ridiculous."

"I think the reason for this financial crisis is the imbalance of some economies themselves. They have for a long time had double deficits and they keep up a high level of consumption on the basis of mass borrowing," he said.

Wen said China, as a big developing nation, needs a large pool of financial resources to achieve economic development and improve the people's livelihood.

"I think that it is confusing right and wrong when people who have been overspending blame those who lent them the money," he said.

As for the economic recession in the United States, Wen said China hopes for the turnaround, or the recovery, of the U.S. economy.

"We believe that to maintain a stable international financial market is in the interests of shoring up market confidence, overcoming the financial crisis, and facilitating early recovery of the international markets," the premier said.

Wen called for enhanced cooperation between China and the United States in face of the worsening financial crisis.

"The priority of the two countries under the current circumstances should be working together to fight the financial crisis and promote the constructive and cooperative bilateral relations," he said.

Wen said China wants to enhance cooperation with the United States to meet the financial crisis together as that represents the larger interest and serves the fundamental purposes of both countries.

He also said the Chinese government looks forward to early contacts with the new U.S. government of President Barack Obama.

"We believe that to maintain cooperation between China and the United States serves world peace, stability and prosperity," the premier said.

The premier called on the U.S. government to view its relations with China from a long-term and strategic perspective.

"I think the U.S. government has a decisive role to play in making the right decisions," Wen said.

On climate change, Wen said China gives top priority to meeting the challenge.

Wen said the Chinese government supports all measures that are playing roles in meeting the challenges of climate change and the development of a green economy.

"We are of the view that to develop a green economy is probably another area in the economy as we meet the international financial crisis," he said.

The premier said China has established a national leadership group to tackle climate change and "I'm head of the group."

China has formulated a national program on coping with climate change, and not only is it the first program of its kind for China, it is also the first of its kind among all developing countries, Wen said.

"We will continue to make efforts on this front and set targets for ourselves," Wen said. "I think this can be seen as a way that China is holding itself accountable to the relevant targets."

Wen arrived in London on Saturday for a three-day official visit. Britain is the last leg of his week-long European tour, which began Tuesday and has already taken him to Switzerland, Germany, the European Union headquarters in Brussels and Spain.