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Economy faces grim time, says China

world Updated: Nov 10, 2012 23:42 IST
Sutirtho Patranobis
Sutirtho Patranobis
Hindustan Times
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Despite signs of a turnaround, the Chinese economy was going through a grim situation because of external and internal factors decreasing exports and rising domestic costs, commerce minister Chen Deming said on Saturday.

Chen criticised recent US Congress report that accused Chinese technology firms Huawei and ZTE of threatening American national security.

Chen, who visited India in August amid worry over trade slump between the two countries, was addressing a press conference on the sidelines of the ongoing 18th National Congress of the Communist Party of China (CPC). The end of the Congress next week will see the baton of Party leadership being passed over to the fifth generation of Chinese leaders.

The Congress, as indicated by Chen and later by the country's top economic planner Zhang Ping, comes at a crucial time.

Chen said, "Trade situation will be relatively grim in the next few months and there will be many difficulties next year."

But Ping, who is head of the National Development and Reform Commission (NDRC) - the Indian parallel could be the Planning Commission - was more positive. He said in Beijing on Saturday the Chinese government was confident of achieving the 7.5% economic growth target this year despite the current slowdown.

Zhang said his faith in the economy lies in an economic curve that is moving upward since August, particularly in October.

Zhang said the economic slowdown in the first nine months was due to a combination of factors such as the macroeconomic control by the government to restructure the economy and shrinking external demand amid lingering sovereign debt crisis in developed countries.

He noted it's necessary for China to maintain an appropriate pace of economic growth, given its population of 1.3 billion people.

While keeping the macroeconomic policies stable, the government has launched preemptive fine-tuning of policies and adopted targeted measures to stabilize the economy, Zhang said.

Latest indicators on industrial output growth, retail sales and exports showed those measures have helped stabilize and improve the economy, he said.

The industrial added-value output growth accelerated to 9.6% year on year in October, from 9.2% in September and 8.6% in August, while retail sales of consumer goods rose 14.5% from a year ago in October, compared with 14.1% in September and 13.2% in August, according to the NDRC.