Chinese Prime Minister Wen Jiabao spoke optimistically about China’s flagging economy during his annual address to the National People’s Congress. Wen outlined extensive measures to enable continued economic growth. In anticipation of new investments Asian markets moved higher on Wednesday, but the Premier did not specify any spending beyond previous commitments.
China’s leaders have long asserted that the country needs to maintain yearly growth of eight percent to preserve political harmony and social stability. And as expected, Wen set eight percent growth in GDP as the country’s target for 2009.
Pessimism about the Chinese economy mounted after figures indicated that GDP growth fell under seven percent in the fourth quarter in 2008. Last fall, China unveiled an impressive $586 billion stimulus package. Some, however, argue that following a further analysis of the infrastructure commitments and tax reductions the package is not as aggressive as it originally appeared. Even with the gloomier horizon, China anticipates growth to pick up again in the future.
Countries around the world realize no one will be left untouched by the global downturn. So, does the news of China’s sluggish growth matter for the country’s relevance in world affairs? Will this impact China’s long-term economic outlook and geopolitical influence? Yes, but the question is how. The ability of China and other rising powers to recover and rebound will be critical for measuring relative international clout. More on this in future posts.
For more, check out FPA’s blog on China.
Photo from Greg Baker/Associated Press.
