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Chinese premier says economy improving

Premier Wen Jiabao said China's economy was showing "positive changes" but called for more efforts to combat the impact of the global financial crisis, state media reported Sunday.
/ Source: The Associated Press

Premier Wen Jiabao said China's economy was showing "positive changes" but called for more efforts to combat the impact of the global financial crisis, state media reported Sunday.

The economy showed "better than expected positive changes in the first quarter" due to Beijing's huge stimulus plan, Wen said on the sidelines of a planned Asian summit in Thailand, the Xinhua News Agency, state radio and other official media reported.

Citing improved investment, consumption and trade figures, Wen said some segments of the economy "are in a process of gradual recovery," Xinhua said. That data were reported earlier, and the premier gave no forecast of first-quarter economic growth, which China is due to report in the next few days.

Some analysts see a recovery taking shape in China as the 4 trillion yuan ($586 billion) stimulus boosts credit growth and demand for steel and other materials. But they caution that the indicators are tentative and show mostly the effect of government spending, while private consumption and investment are weaker.

China's economy is forecast to grow by at least 5 percent this year — the fastest rate of any major country, though down from last year's 9 percent and 13 percent in 2007. Chinese banks have avoided the turmoil that is battering Western financial systems.

Trade data reported Friday showed March exports falling 17 percent, but that was less severe than February's 25.7 percent plunge. A survey of companies released two weeks ago showed Chinese manufacturing expanded slightly in March after a painful monthslong contraction that wiped out at least 20 million jobs.

Wen, the country's No. 3 leader and top economic official, called for continued vigilance, China National Radio reported on its Web site.

"As the crisis has not touched its bottom, we can hardly say that the Chinese economy alone has got out of the crisis," he said. "What we should do is to exert our utmost efforts to minimize the effect of the crisis."

The Communist government worries about unrest if more jobs are lost.

Wen was asked whether Beijing would launch additional stimulus efforts and said it would step up efforts to carry out the current plan, state radio reported. Wen said last month the government was ready to enact additional plans if the impact of the crisis worsened.

"It is essential to closely follow up the changing economic situation at home and abroad, and hammer out new response plans whenever necessary," Wen said, according to China Radio International.

The East Asian Summit that Wen was supposed to attend with other regional leaders was canceled after anti-government protesters stormed the venue in Thailand.

At the summit, Wen had planned to announce a $10 billion fund for investment in Asian infrastructure-building and offer $15 billion in credit to Southeast Asian countries, Xinhua said, citing Foreign Minister Yang Jiechi.

Also Sunday, the People's Bank of China, the central bank, said in a statement it would ensure the financial system would have sufficient liquidity for economic development. The bank said it would boost financing for the agriculture sector and small and medium-size enterprises.