Premier Calls Fiscal Situation “Grim”

By Adriana Villa, on 24 July 2009 – BizChinaUpdate
China is facing “grim” fiscal conditions, according to comments attributed to Premier Wen Jiabao. The situation requires “the unswerving implementation of proactive fiscal policy and relatively easy monetary policy to shore up the economic recovery,” state media reports.
The Chinese economy is “at a critical moment on the road to recovery,” Wen said, and the fiscal conditions remain “grim.” The Premier urged provincial finance authorities to “cut back unnecessary expenditure,” and “put the money into the real economy to promote solid recovery.”
The Premier’s comments come days after a controversial report produced by a Washington-based Asian economic policy unit questioning China’s first-half GDP growth figure. The Heritage Foundation report, entitled China Refuses to Adjust Its Economy, raised questions about how China could “survey the economic progress of 1.3 billion people” in 15 days, concluding the economic results were “manufactured to suit the Communist Party.”

So far for the news flash. People should pay more attention when top leaders come with such announcements. They signal some serious concerns – and I agree. See earlier entries on this blog. We are NOT out of the woods yet. As for the GDP figures, I believe them as much as the top financial analysts and economist of the West. Meaning: wild and meaningless – most have no clue.

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