By Bloomberg News
Nov. 12 (Bloomberg) -- Chinese Premier Wen Jiabao said the world faces a gradual and uneven recovery from the worst financial crisis since the Great Depression.
“The worst is over,” Wen said in speech televised from a forum in Beijing. “The global economy is starting to recover but a total recovery will be a slow and bumpy process.”
Risks include trade protectionism, the sustainability of fiscal stimulus measures, and “price uncertainties,” China’s central bank said yesterday. Confidence in the world economy dipped in November as governments withdrew some emergency measures, sparking concern that a recovery may falter, a survey of Bloomberg users showed.
“It’s going to take a couple of years before we can settle back into steady growth of above 5 percent,” said Tim Condon, chief Asia economist at ING Groep NV in Singapore. While economies may see “very big bounces in 2010,” that will only be “because 2009 was so bad,” Condon added.
China will maintain a moderately loose monetary policy and a “proactive” fiscal stance and continue to fine-tune its 4 trillion yuan ($586 billion) stimulus plan, Wen said. He also reiterated that policy makers need to manage inflation expectations.
He didn’t comment on China’s currency, which has been held at close to 6.83 per dollar since July last year to help exporters as demand slumped. The central bank yesterday triggered speculation that the currency could rise, by dropping a pledge to keep the yuan “basically stable” from its third- quarter monetary-policy report.
Shouldering Its Load
China will “continue opening up, cooperating and shouldering its responsibilities” to help restore stable global growth, Wen said today.
The nation’s industrial production and trade surplus climbed in October, according to data released yesterday. The world’s third-largest economy can maintain stable and relatively fast growth, the central bank said in its report.
China’s expansion has led Asia and the global economic recovery. Its gross domestic product expanded 8.9 percent from a year earlier in the third quarter, while U.S. GDP rose at an annual rate of 3.5 percent from the previous three months.
The Bloomberg Professional Global Confidence Index fell to 60.3 from 61.7 in October, the highest level in the series that began two years ago. The index exceeded 50 for a fourth month, which means there were more optimists than pessimists.
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