China says can roll out extra stimulus if needed

China’s premier Wen Jiabao reassured the world that China could add to stimulus measures if needed to deliver on its promise of solid growth in 2009...

Written by Agencies | Beijing | Published:March 14, 2009 12:05 am

China’s premier Wen Jiabao reassured the world that China could add to stimulus measures if needed to deliver on its promise of solid growth in 2009,but said it would be a challenging year.

“At any time we can propose new economic stimulus policies,” he said,adding that even after rolling out a 4 trillion-yuan ($585-billion) spending plan the government had reserved some ammunition in case the crisis escalates.

Wen also said he was closely monitoring the US economy and was a bit concerned about the safety of Chinese assets there,which he called on Washington to protect.

While the Chinese premier didn’t say it in so many words,the implied warning to Washington was blunt: Don’t devalue the dollar through reckless spending.

Jiabao’s message is unlikely to be misunderstood at the White House. It is counting on Beijing to help pay for its stimulus package by buying US bonds. China is already Washington’s biggest foreign creditor,with an estimated $1 trillion in US government debt. A weaker dollar would erode the value of those assets.

About the safety of Chinese assets,Wen said,“Of course we are concerned about the safety of our assets. To be honest,I’m a little bit worried. I would like to call on the US to honor its words,stay a credible nation and ensure the safety of Chinese assets.”

Wen gave no indication whether Beijing wants changes in US policy. But economists said his comments reflect fears that higher US budget deficits from Washington’s $787-billion stimulus package could drive down the dollar and the value of China’s Treasury notes.

In an annual news conference on the sidelines of the National People’s Congress,Wen said that the country was preparing for a long,difficult time during the financial crisis but he was convinced a recovery was within sight.

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