China to focus on reviving economic growth

Chinese Premier Wen Jiabao said yesterday that stabilising growth was a “top priority”, after fresh data raised more worries of a slowdown in the world’s second-largest economy. “As a big developing country, a certain speed of economic growth must be maintained,” Wen said. “Stabilising economic growth is not only a top priority, but also a long-term arduous task.” His comments came shortly after the government reported that demand for imports fell more sharply than expected in June, leading to a widening of the trade surplus and stoking concerns about an economic slowdown. A day earlier China said inflation slowed in June to its lowest level in 29 months, giving the government more flexibility in its efforts to reboot the economy. Wen said encouraging domestic consumption, diversifying exports and boosting government investment would provide drivers for growth. “Currently, it is important to promote reasonable growth in investment,” he said in a statement. His remarks came just three days before China is due to announce economic growth figures for the second quarter. China’s economy grew an annual 8.1% in the first quarter of 2012 - its slowest pace in nearly three years. Economists expect the economy to have grown 7.6% in the second quarter from a year earlier, according to a poll by Dow Jones Newswires. China early this year set an annual economic growth target of 7.5%, down from expansion of 9.2% last year and 10.4% in 2010. Among the measures already taken to avert a hard landing, the government last week cut interest rates for the second time in a month. The government has also cut reserve requirements — the amount of money banks must hold in reserve — three times since December last year. Top leaders have urged a move away from exports and the promotion of domestic consumption as the key engine of economic growth. The nation’s trade surplus hit $31.73bn in June, up 42.9% from the same month last year, the General Administration of Customs said yesterday. While exports for the month rose 11.3% year-on-year to $180.21bn, imports climbed just 6.3% to reach $148.48bn, according to the government’s data. “While exports increased at a low level, growth of imports was sharply slower than exports as domestic demand declined due to China’s slowing economy,” customs spokesman Zheng Yuesheng told reporters. Compared with May, exports in June declined 0.5% and imports were down 8.9%. “The data overall suggest that domestic investment and global growth are slowing,” Alaistair Chan, an economist with Moody’s Analytics, said in a research report. Slowing domestic growth would prompt China to further ease monetary policy while at the same time boosting investment, analysts said. Wen’s remarks yesterday came after he warned at the weekend that the country’s economy faced “downward pressure” and called for more aggressive moves to keep growth on track. from gulf times.