Premier Wen says China still faces economic problems

BEIJING — China’s top economic official cautioned Sunday that the country still faced economic problems and assured jittery investors that easy credit policies aimed at kick-starting a recovery would continue.

BEIJING — China’s top economic official cautioned Sunday that the country still faced economic problems and assured jittery investors that easy credit policies aimed at kick-starting a recovery would continue.

“We still face many difficulties and challenges and there is uncertainty over the prospect of the international economy,” Wen Jiabao said during a recent visit to eastern Jiangsu province, according to remarks posted Sunday on the central government’s website.

He said the economy continues to be challenged by plunging demand for Chinese exports and challenges in boosting domestic demand.

Wen said Beijing will stick to its “relatively relaxed monetary policy” and a “proactive fiscal policy” — a reference to the 4 trillion yuan ($586 billion) stimulus for the world’s third-largest economy.

Chinese leaders say the country’s recovery is not firmly established even though economic growth accelerated to 7.9 per cent in the latest quarter, up from 6.1 per cent in the previous quarter. They say the rebound is still dependent on government spending and a full-fledged private sector recovery has yet to take hold.

Wen’s pledge of continued easy credit added to a string of government assurances to nervous investors that the flood of bank lending that fuelled China’s nascent economic rebound would continue despite concerns that it might be adding to dangerous speculation in stock and real estate.

Analysts are concerned that stimulus-fuelled speculation in stocks and real estate could cause a boom and bust in those markets. They say reckless lending could add to pressure for prices to rise and leave banks burdened with bad debt.

Total lending by Chinese banks soared to 7.1 trillion yuan ($1 trillion) in the first half of the year. Economists say an estimated 15 per cent of that has flowed into stocks and real estate in violation of government lending rules.

Banks have been told to curtail credit for the second half of the year and make sure borrowers put money into productive investments, according to Chinese news reports. They say 10 lenders, including Bank of China Ltd., the country’s No. 2 commercial lender, were ordered to buy 100 billion yuan ($14 billion) in government bonds to curb their credit growth.

Just Posted

Police investigate shooting at O’Chiese

High-powered firearm involved

Rollover on Hwy 2 near Red Deer

Driver sustains minor injuries

City of Red Deer gets ball rolling on annexing more land

”It’s important we look ahead,” says Mayor Veer

Video: Windows smashed at three Red Deer businesses

Red Deer RCMP arrest man after vandalism spree

NHL stays with status quo as Canada pot legalization looms

As Riley Cote took and delivered countless punches over more than a… Continue reading

Paul Stanley: Kiss farewell tour could include ex-members

ATLANTIC CITY, N.J. — It won’t be all night, but former members… Continue reading

Judge tosses Stormy Daniels’ defamation suit against Trump

WASHINGTON — A federal judge dismissed Stormy Daniels’ defamation lawsuit against President… Continue reading

Canada open to growing trade with China now that USMCA is a done deal: PM

TORONTO — Canada is open to doing more business with China now… Continue reading

Pot shop raids “highly unlikely” on Wednesday: head of police chiefs

VANCOUVER — Police departments across Canada are fully prepared for marijuana legalization… Continue reading

Campers will be able to smoke cannabis at campsites in Canada’s national parks

Parks Canada says visitors should do their research on cannabis before going… Continue reading

U.S. pot firms urge Trump to deny Canadian producers’ ‘competitive advantage’

WASHINGTON — An American cannabis producer is warning President Donald Trump that… Continue reading

Automated cars could kill wide range of jobs, federal documents say

OTTAWA — More than one million jobs could be lost to the… Continue reading

Most Read