In response to criticism over the widely debated Rmb4 trillion ($634 billion) stimulus package launched in 2008, China’s Premier Wen Jiabao, for the first time, publicly defended the action at the World Economic Forum in Tianjin yesterday.
“Some people said that we paid an undue price,” Wen said. “I want to make it clear that it was exactly due to our resolute decision and scientific response that China was able to avoid factory closing, workers losing jobs and migrant workers returning to their villages.”
He added: “These stimulus measures helped us keep the good momentum of economic development, maintain social stability and harmony, and protect China’s modernisation process from major setbacks.”
Criticism is growing both from China and abroad that the unprecedented stimulus triggered a nationwide construction frenzy and weakened the banking system — accusations that are fuelled by a sharp slowdown in China’s economy.
Earlier this month, China’s top planner, the National Development and Reform Commission, approved infrastructure projects that involve a further Rmb1 trillion of investment as a renewed stimulus to support growth.
Wen also outlined a number of advances that China has made over the past 10 years, or during his stint as premier. “Through 10 years of hard work, we have elevated our economic and social development to a new level and laid a more solid material, technological and institutional foundation for future development,” he told the forum, attended by around 1,600 delegates from around the world.
Wen expects China’s economy to switch from fast to steady growth, and he’s confident that the country is on track to meet its growth target of 7.5% this year.
“The speed of growth is still within the target range set at the start of the year, and although growth is slowing down, it is being more stable,” he said. “As the recent measures are implemented and take effect, we expect the economy to further stabilise.”
This may be Wen’s last high-profile appearance in a global event before his scheduled step-down in March next year. China is expected to announce its new leadership next month. Wen is expected to be succeeded by vice-premier Li Keqiang.