Premier of China between 2003 and 2013, Wen Jiabao served as vice-premier between 1998 and 2002. Wen, who was born in 1942, spent 14 years working in Gansu province’s geological bureau before being promoted in 1982 to vice-minister of geology and mineral resources. Wen graduated from the Beijing Institute of Geology in 1968 and has a master’s degree in geology. He was a member of the Politburo Standing Committee between 2002 and 2012.
Wen's warning fuels hope of cuts in reserve ratio
Premier Wen Jiabao's warning of a difficult first quarter and the need for monetary policy adjustments is fuelling expectations of cuts in the bank reserve ratio.
Economists said the ratio of reserves that banks are required to set aside when lending could be cut before the Lunar New Year on January 23, as the mainland economy runs the risk of growing at its slowest pace in a decade amid the spiralling euro-zone crisis and persistent weakness in the US economy.
Wen's bearish tone for the first quarter sent stocks in Hong Kong and Shanghai lower yesterday.
The Hang Seng Index lost 150 points, or 0.8 per cent, to 18,727.31 while the Shanghai Composite Index dropped 30 points, or 1.4 per cent, to 2,169.39, on its first day of trading this year.
UBS economist Wang Tao said the decline in exports had become more obvious and the property market was entering 'a wintry season'.
This could push the mainland's economic growth to as low as 7.7 per cent in the first three months of this year, compared with an estimated 8.6 per cent for the fourth quarter of last year.
'This will trigger more visible policy easing and in turn lift domestic investments and economic activity from the second quarter onwards,' she said.
On a tour of Hunan this week, Wen said the first three months would be relatively difficult and a 'cold market' was 'the core of today's problems'.
He said the mainland was facing the dual challenges of a growing economic downturn and high consumer price inflation - a situation the central government is ready to tackle by fine-tuning its monetary policy.
Wen also warned that the existing market conditions were worse than during the global financial crisis of 2008, alluding to a double whammy for mainland companies of dwindling demand abroad and rising costs at home.
Daiwa chief economist Sun Mingchun said the half-a-percentage-point cut in the reserve requirement ratio on November 30 was a precursor to more such cuts.
He predicts a total cut of 2 percentage points in the first half of the year.
He said he also expected Beijing to reinstate the tax incentives it introduced during the global financial crisis - for vehicles and home electrical appliances - to spur consumption in the event of more global economic turmoil.
'We need to point out that any policy loosening would only be temporarily and limited,' Sun said.
The central government would be watching out for any asset bubbles in the 12th five-year plan to 2015, Sun said.
The rate that Daiwa Capital Markets expects the mainland economy to grow by this year - the lowest in 10 years