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Wen’s warning: Chinese economy to slow more

Chinese Premier Wen Jiabao says China’s economy faces huge pressure to slow further despite stimulus measures. Wen’s remarks damp hopes for a quick recovery from the country’s deepest slump since the 2008 global financial crisis.

Companies and investors are closely watching the world’s second-largest economy for signs of a further slowdown which could have global repercussions by hurting Chinese demand for goods from the United States, Europe and other struggling economies.

State media said on Sunday that Wen promised to “fine-tune” the country’s economic policies, but no details or new initiatives were reported. Wen said the government will press ahead with tax changes that would reduce the burden on many taxpayers, but gave no timetable.

Growth fell to a nearly three-year low of 8.1 per cent in the first quarter.

Wen’s remarks came days after China’s central bank cut interest rates for the second time in a month, with Beijing desperate to bolster an economy that may have suffered its worst rate of growth since the global financial crisis over the April-June quarter.

“China’s current economic situation is generally stable, but it still faces relatively huge downward pressure. We should increase the strength of policy fine-tuning,” the official Xinhua news agency quoted Wen as saying during a trip to the eastern province of Jiangsu. —