On November 29, Chinese Premier Wen Jiabao met and exchanged ideas on issues such as the global economic situation, exchange rates and monetary policy with Jean-Claude Juncker, the president of the Eurogroup and prime minister of Luxembourg, Jean-Claude Trichet, the president of the European Central Bank, and Joaquin Almunia, the EU Commissioner for Economic and Monetary Affairs.
At the meeting, Premier Wen Jiabao pointed out that China has successfully achieved an expansion of domestic demand and the stabilization of export demand, and has ultimately promoted steady growth in its domestic economy despite facing strong pressure from the global financial crisis. He added that the current priority for all governments is to continue to cope with the economic crisis and to stimulate economic development.
As regards recent market concerns over the possible adjustment of the Chinese government's macroeconomic policy and the Dubai debt crisis, the deputy director of the Macroeconomic Research Institution of China's National Development and Reform Commission, Chen Dongqi, stated at the meeting that it would be immature to implement great policy changes next year. He said the monthly money supply next year should be $600 billion. He also expressed the view that the current Dubai debt crisis would not impact the global economy on a large scale.
Mr. Chen went on to state that China's central government firmly stresses the goals of continuity, stability, relevancy and flexibility in its macroeconomic policy for next year for the following reasons:
Firstly, steady development is important for the domestic economy which has just registered an improvement in recent months. Secondly, the global economy is still undergoing a fragile recovery process. Thirdly, a continuous and stable policy is a must for the sustainability of domestic demand, especially as regards automotive consumption. Fourthly, the continuity of the current monetary policy is necessary to ensure the success of the economic stimulus plans. Fifthly, market confidence has showed a certain fluctuation in spite of the improvement already seen, and so only a continued policy of economic stimulation can stabilize market expectations.Finally, China should not take the lead in ending stimulus policies ahead of other countries and regions.
Mr. Chan said that China is this year experiencing its lowest point of recent years and would continue to do so in the first quarter of next year. It is expected that the domestic economy will thereafter resume a course of rapid growth. During this period, Mr. Chen said, the Chinese government should choose reasonable policies and adjust the supply-and-demand dynamics in an active way in order to avoid possible inflation.