Striking an unusually stark tone for a gathering of the country's rubber-stamp parliament, Chinese Premier Wen Jiabao warned last week that China is facing a year of "unprecedented difficulties and challenges" that could spark social unrest if ambitious growth targets aren't met.
Speaking amid an unemployment crisis that has already seen more than 20 million people lose their jobs, Wen said that 2009 could be "the most difficult year for China's economic development since the beginning of the 21st century."
"The global economic crisis is still expanding. We have not seen the worst of it yet. The global market demand continues to contract. The global deflation trend is obvious. Trade protectionism is beginning to rear its head and China's external economic environment is turning more serious," he said in a speech to nearly 3,000 National People's Congress delegates who gathered in the Great Hall of the People in the center of Beijing.
But Wen didn't announce any new spending beyond the $585-billion economic stimulus package unveiled last fall. Many had expected cash-rich China would bolster the existing package. The country has seen growth drop from 13 percent in 2007 to 9 percent last year and just 6.8 percent in the final quarter of 2008.
Wen predicted China would meet its target of 8 percent growth in 2009, although there are mounting doubts the country will be able to sustain such a pace. Given that many economists believe 8 percent is the minimum level of growth required for China to continue creating jobs, Wen acknowledged that the stakes are high.
"In China, a developing country with a population of 1.3 billion, maintaining a certain growth rate for the economy is essential for expanding employment for both urban and rural residents, increasing people's incomes and ensuring social stability," he said.
To achieve that goal, Wen detailed how the government would boost spending on schools, hospitals and other social programs. He said Beijing would "do everything in its power" to stimulate employment.
The jobs crisis in China, the world's third-largest economy after the United States and Japan, is expected to worsen in the coming months when upwards of six million recent university graduates pour into the job market and look for work that doesn't exist. Most of the 20 million laid off so far were poorer migrant workers who had moved from rural areas to take jobs in China's previously booming factory cities.
Wen called on notoriously frugal Chinese consumers to do buy more.
Wen also announced that China is ready for peace talks with rival Taiwan, the island that split from China 60 years ago after a long civil war. "
A spokesman for Taiwanese President Ma Ying-jeou welcomed the remarks, but said Taiwan is more interested in economic agreements first "and political ones later."
(Distributed by Scripps Howard News Service, www.scrippsnews.com.)
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