Early recovery despite difficulties

Premier Wen Jiabao, in a tour of eastern China's industrial Jiangsu Province last month, gave his assessment of the situation.

"Measures taken by the central government to expand domestic demand and maintain growth have begun to take effect in some regions. Sales at some companies started to rebound, stockpiles decreased and electricity consumption increased. Some economic indicators were showing signs of recovery," he said.

Wen has acknowledged that this year would be the most difficult so far in the new millennium for the economy, but he also said China was likely to enjoy the earliest recovery among the world's major economies and achieve 8 percent growth this year.

More recently, in an interview with the Financial Times published over the weekend, Wen said China might take other "new, timely and decisive" stimulus measures.

According to Tang Min, China was likely to announce more measures, including industry-specific support plans, to support growth and the economy was expected to rebound in the second or third quarter.

Three advantages

Tang said China had three advantages in achieving an early recovery. First, the financial system was somewhat insulated from global turmoil; second, the economy had become more flexible after years of continuous reform and third, the government had a strong role in driving economic development.

Since the start of the global crisis, "the Chinese government was one of the fastest to introduce the most ambitious economic stimulus plan," said Tang. He added that he was confident of China's ability to "maintain eight," which is shorthand for the goal of achieving 8 percent GDP growth.

Most Chinese officials and experts believe that the country has to keep the economy growing at least 8 percent to create sufficient jobs for the country's labor force and maintain social stability.

All 32 provinces, autonomous regions and municipalities on the mainland have set annual growth targets for 2009 of at least 8 percent.

Southwest China's Guizhou and northwest China's Shanxi provinces have forecast the slowest rates, of 8 percent. Hebei, Guangdong, Beijing and Shanghai aimed for 9 percent growth, while Shaanxi and Inner Mongolia in northern China targeted the fastest growth rate at 13 percent.

These forecasts differ because they reflect different bases in 2008. For example, last year, Shaanxi and Inner Mongolia were among the fastest-growing economies with GDP rising by 15 percent and 17.5 percent year-on-year, respectively.