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Economists: China's fiscal response swift, forceful(03/23/09)

 BEIJING, March 23 (Xinhuanet) -- China's fiscal response has been swift and forceful in tackling the global financial crisis, said participants of the China Development Forum 2009 held here Sunday.

James Adams, Vice-President in the East Asia and Pacific Region of the World Bank, gives a speech at the China Development Forum in Beijing, March 22, 2009.(Xinhua Photo)
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  Reviewing the country's 4-trillion-yuan (585 billion U.S. dollars) two-year economic stimulus package, James Adams, Vice-President in the East Asia and Pacific Region of the World Bank said, in the current setting, the greater danger is doing "too little, too late, rather than too much, too soon." 

  "The Chinese government was quick to formulate and announce its very large stimulus package. Through this, it has shown real leadership in the international community," said Adams in his speech.

   He noted that China entered the global financial crisis with its large economic stimulus package because of its prudent policies in its economic and financial reforms and development.

  "To ensure that the announced changes in spending and taxation achieve their goals, the focus now needs to be on their effective implementation -- ensuring that planned spending is indeed on high priority, and that funds are actually disbursed and efficiently used," Adams suggested.

  Meanwhile, Haruhiko Kuroda, President of Asian Development Bank, highly commended China's promptness in its response to the crisis.

  "The fiscal stimulus package launched in November 2007 to arrest the economic slowdown is substantial," said Kuroda, "The stimulus package will foster construction and related industries, generate employment, and promote social stability."

  "We are pleased to note, from Premier Wen Jiabao's speech at the 11th National People's Congress, that the government is complementing the stimulus package with a range of measures to stimulate demand and address the social implications of the crisis."

  The 4-trillion-yuan stimulus package will have 1.18 trillion funded by the central government and set four major components: large-scale government spending, industrial restructuring and rejuvenation, scientific research and social safety net.

  Kuroda said he is confident that an effective implementation of the stimulus measures will, among its multipronged attack on the problems, help address the concerns of the more vulnerable groups which are badly affected by the current crisis.

  Echoing the remarks that China's stimulus package was timely and large-scale, Joseph Stiglitzk, Professor of Columbia University said he expected the package to quicken the sustainable development outlined in the China's 11th Five Year Plan.

Joseph Stiglitzk, Professor of Columbia University, gives a speech at the China Development Forum in Beijing, March 22, 2009. (Xinhua Photo)
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  As China's stimulus package covers different social areas, Stiglitzk called people's attention to the following:

  First, investments on infrasture, especially on railway, is of vital importance. Public transportation is becoming an increasingly important area since it could help solve the problem of global warming. Secondly, the stimulus plan could help China establish a more creative economy, support the development of science and technology. Now it's the right time for overseas Chinese scientists to return. Thirdly, the plan can help China strengthen social security system and service system. Finally, the investments on education and health care have dual benefits since it can not only bring benefits to the economic areas, but also give them stimulus.

  As waning foreign demand battered coastal exporters, China has seen about 20 million out of 130 million migrant workers returning to their rural homes without jobs.

  "And this will impose huge social pressure," warned Stiglitzk, adding "China's policy of encouraging the unemployed youth to start their own businesses is a good way to deal with the problem."

  China pledged it will implement an even more proactive employment policy this year and allocate 42 billion yuan to offset unemployment caused by the global financial crisis. To create more jobs, the government will make full use of the service sector, labor-intensive industries, small and medium-sized enterprises, and the non-public sectors, said Chinese Premier Wen Jiabao at the opening of the National People's Congress annual session on March 5.

  The three-day China Development Forum 2009 under the theme "China's Development and Reform in the Global Financial Crisis" began on Saturday.



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