The country's top leadership pledged to take steps to ensure a "stable and relatively fast" economic growth next year as it wrapped up the three-day Central Economic Work Conference (CEWC) in Beijing Wednesday.

President Hu Jintao and Premier Wen Jiabao addressed the annual conference that sets the tone for next year's economic development.

President Hu Jintao addresses the annual Central Economic Work Conference in Beijing, December 10, 2008. [Xinhua]

Policymakers at the CEWC vowed to boost domestic demand and carry out economic restructuring to maintain a sound economic growth amid the deepening global financial crisis.

The worsening global economic situation forced the World Bank Wednesday to cut its growth forecast for the world economy from 1 percent to 0.9 percent next year. And the global trade volume would contract by 2.1 percent, it said.

To tackle the crisis, the government has put creation of jobs and improving people's livelihood on top of its agenda, the CEWC said. A China Central Television (CCTV) report said the government would increase its spending on rural development, education, services, healthcare, social security, job creation, environmental protection and technological innovation.

The government announced a $586-billion stimulus package on Nov 9 and slashed the interest rate by 1.08 percentage points, the highest in 11 years, on Nov 26 to boost domestic demand and minimize the impact of the crisis.

While maintaining its proactive fiscal policy and moderately relaxed monetary policy, the country will implement a "flexible and careful" macroeconomic regulation to ensure that the economy fares well next year, the conference said.

The country will aim for a "stable and healthy" development of the capital and real estate markets after its major stock indices have fallen by more than two-thirds since late last year and property sales dropped dramatically in some cities, it said.

The Shanghai Composite Index ended up 2 percent after dropping more than 1 percent in the morning trading. Investors rallied on the CEWC because they had expected it to reach a consensus on supporting the capital and real estate markets, said Sun Lijian, an economist with Fudan University.

The top leadership expressed confidence in bolstering economic growth, saying the country has been able to minimize the impact of the global financial crisis.

"The only thing we have to fear is fear itself," Premier Wen told the CEWC, quoting former US president Franklin D. Roosevelt's words during the Great Depression, according to sources. "China has the ability to overcome difficulties," Wen said.

Analysts widely expect the government to set an 8 percent GDP growth target for next year.

This is somewhere between the World Bank's prediction of 7.5 percent and the country's top think tank, Chinese Academy of Social Sciences' forecast of 9.3 percent.

"It would be more realistic to put the growth forecast at 8 percent, given the gloomy global situation and China's determination to boost its economy," said Dong Yuping, senior economist with the Institute of Finance and Banking of the social sciences academy. "It will hinge on the effect of the country's stimulus package."

Despite the World Bank forecast of 7.5 percent GDP growth for China next year, its chief economist Justin Yifu Lin told Xinhua Wednesday that the country could manage to achieve an 8 percent growth.

The global financial crisis notwithstanding, participants at the conference said important opportunities for China's economic and social development still exists and "would not be reversed by ongoing global financial woes".

All measures taken will ultimately target improving people's living standard, they said.

The conference stressed more efforts should be made to "solve problems related to interests of ordinary people, so as to maintain social stability".

In this regard, expenditures in public areas will be "substantially increased" and those in major areas guaranteed.

Wide-ranging measures should be taken to improve the social welfare system both in urban and rural areas, the conference agreed.

(China Daily?December 11, 2008)