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China can fulfill year's growth target: Premier

Updated: 2012-08-16 08:57
( Xinhua)

HANGZHOU - Premier Wen Jiabao has said China is capable of meeting its economic and social development goals for the year despite domestic and external challenges.

During an inspection tour of eastern China's Zhejiang Province on Tuesday and Wednesday, Wen pointed to positive changes in some sectors, and the emergence of favorable conditions to maintain steady and relatively fast growth.

"We have the conditions and capabilities, and will be sure to fulfil this year's economic and social development targets," he said.

The economy's fundamentals remain sound, the premier said, but he warned that the foundation for economic stabilization is still unstable, and that economic hardships may continue for some time.

The government pared its gross domestic product (GDP) growth target for 2012 to 7.5 percent from the previous 8 percent in March in the wake of a persistent slump in the United States and spreading debt woes in the eurozone.

Dragged down by a lackluster external market and government efforts to cool inflation, the country's GDP growth hit a three-year low of 7.6 percent in the second quarter of 2012.

Government leaders, enterprises and the whole society should have confidence, especially in times of difficulty, Wen said, calling for government authorities to carry out work in line with new conditions and local realities.

During meetings with local entrepreneurs in Zhejiang, where GDP growth rebounded slightly in the second quarter, Wen said the economy has shown positive changes over recent months, especially since July, as both investment and consumption have grown steadily.

Wen said industrial production in eastern regions is picking up slowly, with July's industrial output growth in Guangdong, Zhejiang and Jiangsu up by 1.4, 1.9 and 0.7 percentage points, respectively, from those recorded in the first half.

Wen also cited a stable job market, which saw 8.12 million new urban jobs created in the first seven months, up 390,000 from the same period of last year, and easing price gains, which provides more room for monetary loosening.

Growth of the consumer price index, a key gauge of inflation, dropped to 1.8 percent year on year in July, the slowest rate since February 2010.

The country's central bank earlier in the year slashed the reserve requirement ratio for banks twice and interest rates twice in a bid to boost lending.

According to Wen, the country has adopted a raft of pro-growth measures to shore up growth. They include more aggressive tax reduction, issuing subsidies to support enterprises' technology upgrades, and opening state-run sectors to private investors.

The country has allocated 26.8 billion yuan ($4.25 billion) in interest subsidies to help companies update technology, Wen said.

Meanwhile, the proportion of private capital in fixed assets investment has risen to 62 percent due to government favorable polices, he noted.

After listening to accounts of some enterprises' operational difficulties, Wen said they should be prepared for a relatively long period of grim foreign trade, and labor-intensive companies should speed up industrial upgrading.

At a meeting discussing the local employment situation, Song Li from Zhejiang's provincial employment center said the persistent drop in local employment is a structural problem, as no one is willing to undertake low-end jobs which are usually hard work.

The eastern economic hub of Zhejiang saw 573,500 new jobs in the first seven months, a rise of just 1.92 percent from last year, according to Song.

Despite an average 15-percent rise in annual wages, not many people are interested in blue-collar jobs, entrepreneurs reported.

Wen replied that the government should pay high attention and give top priority to job creation in the face of the economic downturn.

He urged efforts to strengthen employment guidance, render special support to labor-intensive and small companies, promote employment of college graduates and provide services to migrant workers who return to their hometown for employment.

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