China’s Leader Defends Economic Policies

What does the Chinese Prime Minister think of the economic policies of China?

From March 5 to March 12, China and the world witnessed the most important meetings – National People’s Congress (NPC) and China People’s Political Consultative Conference (CPPCC) – open and close in Beijing.

During the conference, the representatives from different provinces, different industries and different fields discussed the state affairs from different respects. Both China and the world paid attention to the two meetings, wondering what they would bring to the largest populated country as well as the whole world.

On March 13, 2010, Chinese Prime Minister held a press release to deflate rising pressure from the United States and other powers over China’s economic policies and growing assertiveness in world affairs, with its prime minister promising cooperation to bolster global recovery.

Mr. Wen took on critics in the West who say his policies lift China while keeping global growth anemic. He defended China’s currency against assertions that it is undervalued to boost Chinese exports. He also promised that Beijing would import more and urged countries to resist protectionism, saying one nation should not seek to disadvantage others during the fragile economic recovery.

“We are opposed to the position of engaging in mutual finger-pointing or taking strong measures to force other countries to adjust exchange rates,” Mr. Wen said in a more than two-hour news conference for which questions were prescreened. The news briefing is the only one Mr. Wen holds all year and is thus often used by the government to send a message to the Chinese public and the world.

Mr. Wen criticized the United States for souring relations with the recent White House reception for the Dalai Lama, the exiled leader of Chinese-controlled Tibet, and for approving arms sales to Taiwan, which China claims as its own. “The responsibility does not lie with the Chinese side, but the United States,” he said.

Beijing is on the defensive in Western capitals. Its seeming intransigence at December climate-change talks in Copenhagen, Denmark, riled some. Other governments are grappling with high rates of unemployment and swelling deficits to fend off recession, even as the Chinese economy bounced back to 10.7 percent growth last year. The Chinese currency, the yuan, has become a focal point for criticism in Washington, Europe, and other countries.

Before the start of the NPC and CPPCC, the US President Obama urged China to move “to a more market-oriented exchange rate” to help balance world growth. The US Treasury must report to Congress in April whether China qualifies as a “currency manipulator” – a label that could precede a complaint to the World Trade Organization and possible sanctions on Chinese goods.

With the storm clouds brewing, Mr. Wen said more coordination was needed among economic powers to prevent the world economy from sagging into a “double-dip” recession.

Mr. Wen renewed appeals for assurances from Washington about the safety of China’s 800 billion US dollars in foreign-exchange reserves invested in US Treasury securities. He said the value of the US dollar was a “big concern” and asked Washington to take unspecified steps to reassure investors.

He also said economic ills left untended could threaten Communist rule. A particularly toxic combination, he said, were inflation, the rich-poor income gap, and corruption - all current problems. “These will be strong enough to affect our social stability and even the stability of state power,” he said.

During the press release, Mr. Wen quoted several famous Chinese ancient poems to describe the current situation and China’s confidence in dealing with the troubles. At the end of the meeting, Mr. Wen said: “China’s modernization is not only the modernization of economy. Actually, it should contain the social fairness, justice and power of morality. I will try my best to reach goal during my tenure and I believe that the Chinese leaders will consistently focus on the issue.”