By staff reporter Wang Ke
The current crisis has had a significant impact on China's economy and 2009 will be a most difficult year, but one full of challenges and opportunities, an official from the Ministry of Finance indicated at the Fifth China CFO Summit Forum in Beijing.
Mr. Zhang Xuewen, deputy director of the Economy Construction Department under the Ministry of Finance, said to China.org.cn: "China is now facing severe challenges, including notably shrinking external demand, overcapacity in some sectors, difficult business conditions for enterprises, rising unemployment in urban areas and greater downward pressure on economic growth."
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Zhang Xuewen, deputy director of the Economy Construction Department under the Ministry of Finance, spoke at the forum.(China.org.cn/Wang Ke)
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"Enterprises need to have the confidence that the country will be able to get through difficult times, because the financial system is stable, there is plenty of potential in the market, and we have ample room for maneuver," he said.
During his European tour earlier this year, Premier Wen Jiabao expressed optimism about China's ability to combat the impact of the current global economic crisis and emphasized the importance for the world of maintaining confidence in the face of the crisis.
According to the Ministry of Commerce, Chinese people spent a total of 290 billion yuan ($42.6 billion) shopping for the Spring Festival celebration. This expenditure represented a 13.8 percent growth against the same period of last year, and more than 100 million tourists traveled to domestic and foreign destinations during the holidays.
The government has adopted a complete and comprehensive package plan to stimulate economic development.
Mr. Zhang said: "As Premier Wen stressed, the package plan has five key components. Boosting domestic demand should be supported principally by major government spending: the 10 key industries should be adjusted and revitalized, technological upgrading should be advanced, social security should be stressed, and financial stability should be maintained."
Last year, GDP growth reached 9 percent as a whole. But in the fourth quarter of 2008 it declined and fell to 6.8 percent, mainly due to shrinkage in external demand caused by the international financial crisis.
Chinese businesses are experiencing such difficulties as overcapacity in some industries, rising unemployment and so forth, Zhang said.
But Zhang told China.org.cn: "Where there is a challenge, that's where you'll find an opportunity."
China has now launched an investment program worth 4 trillion yuan over two years to stimulate domestic demand, especially consumer spending. Meanwhile, the government will spend 600 billion yuan on scientific and technological innovation and upgrading, and also will invest 850 billion yuan for the improvement of the medical and health care system.
"The government is leading the way and enterprises should follow closely. These huge investments can create enormous markets for many industries. That's the opportunity," Zhang said.
