Chinese Premier Wen Jiabao (L) smiles during an exclusive interview with Xinhua News Agency at Ziguangge building inside Zhongnanhai, an office compound of the Chinese central authorities at the heart of Beijing, capital of China, Dec. 27, 2009. (Xinhua photo)
Chinese people should be proud of the country's economic performance as the government's economic stimulus package proved effective, Premier Wen Jiabao told Xinhua Sunday in an exclusive interview.
"We have stabilized economic growth and employment and maintained social stability over the past one year period, which is a comfort to me," he said.
China's economic growth has approached its pre-crisis level a year after the adoption of the 4-trillion-yuan ($585.6 billion) economic stimulus package.
Gross domestic product (GDP) grew 8.9 percent year on year in the third quarter, accelerating from 7.9 percent in the second quarter and 6.1 percent in the first. In the third quarter of last year, GDP was up 9 percent from a year earlier.
However, it was too early to grade the performance as the global financial crisis was not over and much work was yet to be done, Wen said.
"We will have to pay some price and face unexpected difficulties in tackling such a big crisis," he said.
He took the country's credit expansion as an example. "It would be good if our bank lending was more balanced, better structured and not on such a large scale," he said.
Wen said the State Council had noticed the issue in the middle of the year and moved to correct it. "It has been improving in the second half of this year," he said.
In the first 11 months, new bank loans hit 9.21 trillion yuan, an increase of 5.06 trillion yuan over the same period last year, far exceeding the full year target of 5 trillion yuan the government set this March.
The State Council had to learn from past experience, detect problems and make persistent efforts to fight the crisis effectively, he said.
Despite the 4-trillion-yuan investment plan, the government also adopted more pro-growth economic policies, such as the proactive fiscal policy and moderately easy monetary policy and expanding the subsidized home appliances purchase program in rural areas.
Although a lower comparison base contributed to China's strong economic data in November, a rosy future was widely expected as a V-shaped recovery consolidated in the world's third largest economy.
Foreign trade, a major economic driver, reversed its downward trend of 12 consecutive months, rising 9.8 percent year on year in November. The consumer price index (CPI), a main gauge of inflation, rose 0.6 percent year on year in November, its first monthly growth since January.
During the Central Economic Work Conference, the key annual economic planning meeting, the government decided to maintain the continuity and stability of macro-economic policy and continue implementing the proactive fiscal policy and moderately easy monetary policy in 2010.
The State Council had thoroughly discussed measures to cultivate new economic growth points, especially relating to emerging strategic industries such as the Internet, the green economy, the low-carbon economy, sensor technology and bio-pharmacy, Wen said.
"I think one of the linchpins for the world to overcome the economic crisis is wisdom, and, most importantly, science and technology," he said.
Balanced credit expansion
Premier Wen Jiabao admitted that it'd be good if lending by Chinese banks had not been growing on a too large scale as a result of the government's immediate response to the global financial crisis.
"It would be good if our bank lending was more balanced, better structured and not on such a large scale," he said.
Wen said the State Council had noticed the problem in the middle of the year and moved to correct it. "It has been improving in the second half of this year," he said.
Credit expansion was one of the "unexpected difficulties" China had encountered in dealing with the worst crisis in decades, Wen said.
The State Council had to learn from past experience, detect problems and make persistent efforts to fight the crisis effectively, he said.
Wen said it was too early to grade China's performance in tackling the crisis because it was far from over and much work was yet to be completed.
He admitted that the State Council had time in the second half of the year to calmly reflect on the problems arising from the emergency response to the economic crisis.
The State Council had thoroughly discussed measures to cultivate new economic growth points, especially relating to emerging strategic industries such as the Internet, the green economy, the low-carbon economy, sensor technology and bio-pharmacy, he said.
"I think one of the linchpins for the world to overcome the economic crisis is wisdom, and, most importantly, science and technology," he said.
Confidence, responsibility, cooperation
Premier Wen said the government had stressed confidence, responsibility and cooperation in dealing with the effects of the global economic crisis.
"Since the very beginning of the economic crisis, we have felt no country could evade the grave impact of crisis or solve it alone," Wen said in an exclusive interview with Xinhua.
"(The international community) must strengthen cooperation to deal with it together."
Referring back to his speech to the United Nations in New York in September last year, Wen said confidence was more economically important than gold or any currency.
"As a big developing country, China must run its own affairs well and leave no trouble for others," he said. "We acted as promised.
"We have participated actively in the international exchanges and cooperation to overcome the crisis," he said.
"As well as signaling our confidence, we decided to send delegations on buying mission to Europe in the hardest time early this year," Wen said.
China continued to expand currency exchanges with other economies and carried out the Chiang Mai Initiative to establish a foreign exchange reserve pool of Asian countries. It also began RMB settlement trials.
"All actions are conducive for the international community to work together to tackle the crisis," he said.
China announced in December last year it would start allowing RMB settlement of international accounts on a trial basis.
The government announced this month it would increase the number of pilot cities carrying out yuan settlements in foreign trade from the current five -- Shanghai, Zhuhai, Guangzhou, Shenzhen and Dongguan -- to help export companies avoid foreign exchange rate fluctuations.
Science, technology key to economic development
Premier Wen said that China would rely on science and technology to change its growth pattern.
"It (science and technology) is key to China's economic development," Wen made the remarks when asked how China would respond to global scientific innovation expedited by the international financial crisis.
China's economic problem is a structural problem, he said. "Our economy is still unbalanced, uncoordinated and unsustainable," he told Xinhua in an exclusive interview.
The premier said efforts should be focused on achieving a balanced development among primary, secondary and tertiary industries as well as among different regions.
Wen said financial crisis in history always brought about technological revolution. "The key to conquer the global economic crisis lies in people's wisdom and the power of science and technology," he said.
In the latter half of the year, China started to foster new growth areas, especially in emerging strategic industries, said Wen.
Wen did not elaborate on "emerging strategic industries" but said that the country should continue to give full play to its advantage in the manufacturing sector, while strive to develop important areas related to environment and people's living.
Efforts should be made to develop Internet, green economy, low-carbon economy, environment protection technology and biomedicine, he said.
Reform of household registration system
Wen said China would advance the reform of its decades-long household registration system in a steady manner, in a bid to ensure migrant workers to have equal rights as city dwellers.
Those policies are also key to speeding up urbanization and boosting domestic consumption, Wen said in the interview with Xinhua.
Specific measures were still being studied, but the government had figured out two priorities, said Wen.
"Farmer-turned workers who have been living in cities with a stable income are a priority," Wen said.
"The government will create policies to encourage migrant workers to settle down in small and medium-sized towns and cities, as big cities have limited capacities," Wen said.
Started in the 1950s, the household registration system categorizes Chinese citizens into urbanites and non-urbanites and has prevented rural residents from migrating freely to cities.
Chinese migrant workers have made great contributions, and even "sacrifices", to the country's development over the past few years, Wen said.
Wen said he had a lot of compassion for migrant workers. He mentioned he received a letter a few days ago from a migrant worker named Xiong Deming in Chongqing Municipality, who once got her wages back with Wen's help in 2003.
"The government has started studying the deep-seated issues concerning migrant workers," Wen said.
The two-hour interview was held at Ziguangge building inside Zhongnanhai, an office compound of the central authorities at the heart of Beijing.
Improving people's livelihood always a priority
The Chinese Premier Wen Jiabao stressed on Sunday that the final ends of the nation's economic growth is to improve people's well-being, which is always a priority on the government's agenda amid the global financial crisis.
Despite the tight fiscal condition, China beefed up the income and welfare enjoyed by the retirees and low-income residents, and unveiled the significant health-care reform in 2008, according to Wen.
"We will overcome every difficulty to well implement the health-care reform which has close bearing on people's health," he said.
Wen said the rural medical cooperative system has covered more than 800 million people, and more than 400 million urban dwellers had joined the urban medical insurance system.
Although the health care security service has covered more than 1.2 billion people, the current safety level remains low, he said.
Wen noted the government had made great efforts to step up health care infrastructure in rural areas and urban communities. Reforms are also made to make medicine more affordable for patients.
He also stressed the significance of the pilot program of rural pension insurance.
"Farmers aged over 60 could get 55 yuan a month. It is not a big sum, but it begins a new era," he said.
Since the global economic crisis broke out at the end of last year, the Chinese government has timely implemented a stimulus package which stepped up financial support and policy incentives to improve people's well-being and stimulate domestic demand, in order to shore up economic recovery.
China has spent 728.46 billion yuan ($107.13 billion) to enhance education and medical systems, social security, job promotion, affordable housing construction, and cultural development. The investment was an increase of 165.33 billion yuan from a year ago.
Inspection tours inform gov't decisions on economy
Frequent inspection tours around China by senior central government leaders contributed greatly to government decision-making in coping with the global economic downturn, Premier Wen said.
Top leaders, including President Hu Jintao and Premier Wen Jiabao, had visited many businesses since June last year, looking for solutions to the economic slowdown.
"I went for three main reasons: to send a message of confidence, to learn about the situation, and to study and formulate policies".
"I myself had visited more than 20 provinces, autonomous regions and municipalities (of the total 31 on the Chinese mainland)," he said.
He said that during an inspection tour of a textile factory in the eastern city of Wuxi in July last year, he saw how the economic crisis had begun affecting export-oriented businesses in the coastal areas.
"After the investigations, the government changed the pre-set economic policies in the second half of last year: we began lowering the reserve ratio, decreasing the interest rate and raising the export rebate rate," he said.
Based on the inspection tours and investigations, the central government subsequently formulated a string of measures to boost domestic demand, such as the 4-trillion-yuan ($585.6 billion) economic stimulus package and the rural home appliances subsidy program.
"When we are looking back on the past, we can see that China acted fast in coping with the economic downturn and the measures were strong," he said.
China has hope, despite bumpy road ahead
Premier Wen urged the Chinese people remain aware of possible hardships and crises in the upcoming year and to work hard for a more promising future.
The way ahead for the Chinese people would be "a bumpy road," but the nation had made transparent achievements in tackling the global economic downturn.
"The Chinese people have gone through so many disasters. And one eminent tradition of our nationality is to be independent and indomitable without fear," he said.
Wen said perseverance would lead to success and hoped all Chinese would make persistent efforts under the leadership of the Community Party of China and the central government.
"China has a great deal of hope in its future," he said when asked to give his New Year message to all Chinese.
