China legislature hears cabinet report on financial crisis
24/12/2008 17:23
The legislature heard in Beijing today a somber report on how the
intensifying impact of the world financial and economic crisis is reverberating
through China's economy.
Zhang Ping, minister in charge of the National
Development and Reform Commission, representing the State Council (cabinet),
outlined the situation to the Standing Committee of the National People's
Congress.
He described how, since the third quarter, the impact had spread
from coastal areas to inland regions, from export-oriented industries to other
sectors, and from small companies to big ones.
Zhang said the deepening
crisis and the fast-evolving world economic situation had greatly affected
China's economy, with overall growth slowing and imports falling -- a situation
unseen for many years.
Zhang also noted that investment demand had weakened
and there were "difficulties" in industrial production, along with falling
revenues and profits for business.
Zhang said that both exports and
investment growth were rapidly slowing and industrial production was obviously
declining, as shown by electricity use. Property and vehicle markets were
sluggish, unemployment was up and international market turmoil had "shattered"
domestic investment sentiment.
In response to the difficulties emerging since
the third quarter, Zhang said, the central government decided to invest 100
billion yuan (about US$14.62 billion) during the fourth quarter on new projects
and allocated a special earthquake relief fund of 20 billion yuan.
About 38
billion yuan will go to low-cost housing, rural infrastructure and education
facilities. Some 19 billion yuan will be invested in large dams, crop storage
and farm animal quarantine networks. About 18 billion will be channeled into
energy efficiency and pollution reduction programs. The rest of the
fourth-quarter economic stimulus fund, roughly 25 billion yuan, will be used in
building highways and urban power grids, Zhang said.
The central-government
stimulus plan is expected to draw matching funds from local governments, with
the total investment reaching about 400 billion yuan, he said.
Zhang said
central government investment should be carried out in a "transparent and
efficient" fashion, with strict market access standards in line with industry
policies.
"Detailed plans on expansion of domestic demand over the next two
years should be formulated as soon as possible," he said, adding that "measures
to maintain stable export growth should be formed without delay," along with a
program on reviving pivotal industries.
"The stability of agriculture is
essential against a backdrop of an international financial crisis," said Zhang,
adding that efforts should be stepped up to increase agricultural production and
farm incomes.
Xinhua
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