Quick turnaround
In September, the government made a macroeconomic U-turn as it shifted from fighting overheating to actively stimulating the economy. The central government announced a series of measures to spur investment and expand domestic demand. These included a 4-trillion-yuan stimulus package, a plan to expand rural ownership of home appliances and the issue of 3G telecoms licenses.
Additionally, the People's Bank of China (central bank) has cut interest rates five times since Sept. 15.
Unlike some emerging market economies, China is in a relatively strong position in terms of foreign debt. As of Sept. 30, outstanding foreign debt was about 442 billion U.S. dollars, up about 18 percent from the end of 2007. Short-term debt accounted for about two-thirds of the total. At end-September, foreign reserves totaled about 1.9 trillion U.S. dollars.
China's central government finances also provide it with some degree of flexibility: last year's budget deficit was about 111 billion yuan, but that was less than 1 percent of GDP.
Regional impact varies widely
Another significant factor, Yuan said, was that many inland and northern regions were less affected by the financial crisis and its impact on exports.
In comparison with more export-oriented provinces such as Guangdong and Zhejiang, where many factories cut back or shut down, inland and northern Chinese regions had been less affected. "Regions or companies with more connection with domestic demand suffered less impact," he said.
NBS' Ma said he was confident of the economy's prospects partly because robust demand in less-developed central and western regions would continue to propel national growth.
These less-affected regions were seeing more development opportunities in the past two months as the central government acted to stimulate the economy.
Party chief Zhao Shihong of Langfang in north China's Hebei Province did not think the financial crisis had exerted a significant impact on the city, which is located between Beijing and Tianjin. Instead, he said he expected the response to the crisis would mean opportunities for the city.
Langfang won big projects valued at more than 10 billion yuan from the country's stimulus plan, including construction of two light rail lines. "It would have been very difficult to win [such] investment in the past," he told Xinhua.
Zhao forecast the city's economy would grow up to 12 percent this year despite the financial crisis.
