Wen Jiabao vows to tap fiscal surplus, stability fund
Premier pledges to stabilise economy by tapping fiscal surplus, stability fund; defends his legacy
Premier Wen Jiabao pledged for the first time to tap into the government's fiscal surplus as well as a fiscal stability fund of more than 100 billion yuan (HK$122b) as needed to stem an economic downturn.
Wen also used his last appearance before retirement at the World Economic Forum in Tianjin , his hometown, to review the political legacy of the past decade, and robustly defended the four-trillion-yuan stimulus package introduced during the global crisis.
Wen said China's economic development had "slowed but stabilised". He reiterated that the priority was to stabilise growth, which last quarter slid to the slowest pace in three years.
"We have ample strength in either monetary or fiscal [resources]", Wen said. The government's trillion-yuan fiscal surplus, together with the fiscal-stability fund, would be used as "pre-emptive and fine-tuning steps at appropriate times".
A rise in inflation has limited room for further interest rate cuts, explaining Beijing's inclination to use fiscal policy to prevent a further slowing.
Wen defended stimulus packages rolled out during the global crisis and criticised for fuelling inflation and asset bubbles. "I want to seriously state that it was only because of our resolute decision … we were able to prevent business closures, workers' job losses, and the return of migrant workers to the countryside."
He said the progress made during the past decade had been "tremendous" in areas including boosting economic output, improving people's livelihoods, boosting farmers' income and reforming state-owned sectors.
At the end, Wen said emotionally: "I've served the nation for 45 years and will retire in a few months." He called on all countries to work together to tackle the economic challenges.