Tokyo, May 31: Chinese premier Wen Jiabao warned on Monday that global economic growth remained vulnerable to sovereign debt risks and the possibility of a second downturn, while saying his own country’s growth remained on track.
Referring to the risk of a second dip in global economic growth rates, Wen said “I believe that we can’t say with absolute certainty, so we must undertake close observation and act to prevent it.”
He said it was too early for economies to consider exiting from their stimulus spending.
“All countries must coordinate together and strengthen support to the economy. There cannot be the least relaxation,” he told a meeting with Japanese business leaders in Tokyo.
“The world economy is stable and beginning to revive, but this revival is slow and there are many uncertainties and destabilising factors.”
Wen mentioned problems of countries including Greece and added: “Is this phenomenon over? Now it seems that it is not so simple.”
He said Europe’s sovereign debt problems may drag down its rates of growth.
“In these circumstances we propose that what is needed is an appreciation of the threats, calm observation and a steady-handed response.”
He remained confident that China could achieve its growth goal for this year, but said China would also have to “maintain a certain level of intensity in its economic stimulus.”
He also stressed several times the risks that inflationary pressures posed to the Chinese economy.
Referring to China’s goal of keeping annual CPI in 2010 within 3%, he said, “Achieving this is an important goal for this year.”
—Agencies