EASY READING CULTURE OF LIFE NEWS: WEN’S DAVOS SPEECH: MAKING CHINA STRONGER « Culture of Life News 2
Chinese officials listening to boss speech.
It was much easier to find a useable pdf of Putin’s speech. Finding one that I could click and drag of Wen’s speech was difficult. I tried and tried and hit pay dirt with a Chinese posting forum. Lucy Lee was very generous about posting a useable online transcript of Wen’s major speech. Like the Putin one, it is important for us to read. One reader of this blog, Fred, sent me a WSJ tidbit that notes:
The Chinese premier gently, but firmly warned that if Washington and Beijing chose confrontation, both would be losers. But the different tones of the two speeches, and the fact that Mr. Wen didn’t call for replacing the dollar’s role as the world’s reserve currency but regulating it, reflect crucial differences in the important emerging economies.
First, South America is having its own Davos. Many SA Presidents are there including Chavez. There are no US representatives there. I wish Obama went. But that is like asking him to tour Africa first.
Indians gather to discuss the rights of indigenous peoples at the World Social Forum in Brazil. The WSF is an annual countercultural event to protest the World Economic Forum held annually in Davos, Switzerland.
Chinese Premier Wen Jiabao speaks at the World Economic Forum
annual meeting, in Davos, Switzerland, on Jan. 28, 2009.
(Xinhua/Yao Dawei) Strengthen Confidence and Work Together for A New Round of World Economic Growth
28 January 2009
Professor Klaus Schwab, Executive Chairman of the World Economic Forum, Ladies and Gentlemen,
I am delighted to be here and address the World Economic Forum Annual Meeting 2009. Let me begin by thanking Chairman Schwab for his kind invitation and thoughtful arrangements. This annual meeting has a special significance. Amidst a global financial crisis rarely seen in history, it brings together government leaders, business people, experts and scholars of different countries to jointly explore ways to maintain international financial stability, promote world economic growth and better address global issues. Its theme — “Shaping the Post-Crisis World” is highly relevant. It reflects the vision of its organizers. People from across the world are eager to hear words of wisdom from here that will give them strength to tide over the crisis. It is thus our responsibility to send to the world a message of confidence, courage and hope. I look forward to a successful meeting.
The ongoing international financial crisis has landed the world economy in the most difficult situation since last century’s Great Depression. In the face of the crisis, countries and the international community have taken various measures to address it. These measures have played an important role in boosting confidence, reducing the consequences of the crisis, and forestalling a meltdown of the financial system and a deep global recession. This crisis is attributable to a variety of factors and the major ones are: inappropriate macroeconomic policies of some economies and their unsustainable model of development characterized by prolonged low savings and high consumption; excessive expansion of financial institutions in a blind pursuit of profit; lack of self-discipline among financial institutions and rating agencies and the ensuing distortion of risk information and asset pricing; and the failure of financial supervision and regulation to keep up with financial innovations, which allowed the risks of financial derivatives to build and spread. As the saying goes, “A fall in the pit, a gain in your wit,” we must draw lessons from this crisis and address its root causes. In other words, we must strike a balance between savings and consumption, between financial innovation and regulation, and between the financial sector and real economy.
Both Russia and China decided, I suspect, jointly, to not mention the names of the offending parties. They both figured, even dimwitted Americans would figure out who fits the descriptions in both speeches. But then, Americans are very adept at not looking in any mirrors. Our Manichaein world is set up so we are always the ‘good guys’ as Bush famously said after he crawled out of hiding after 9/11. One of the chief features of our long, drawn-out collapse since July, 2007, has been the utter cluelessness of nearly all of the people running the US. They just cannot see what went wrong.
The US government, above all, doesn’t want any finger pointing because this will cause obvious problems at home. As it is, the US public is in an uproar over the news that all the major Wall Street ‘bankers’ handed out over $14 billion in bonuses in a year that featured nearly total losses. On top of that, the buying of new corporate jets, going on vacation to hot spots, etc. has enraged the mobs. Needless to say, all this, on the taxpayer’s dime. The whole concept of risk is, the risky players get punished if their bets go bad. Not, run off to the Treasury and get some Goldman Sachs con man to cover everyone’s losses.
Back to Wen:
The current crisis has inflicted a rather big impact on China’s economy. We are facing severe challenges, including notably shrinking external demand, overcapacity in some sectors, difficult business conditions for enterprises, rising unemployment in urban areas and greater downward pressure on economic growth.
As a big responsible country, China has acted in an active and responsible way during this crisis. We mainly rely on expanding effective domestic demand, particularly consumer demand, to boost economic growth. [ELAINE: unlike Japan!] We have made timely adjustment to the direction of our macroeconomic policy, swiftly adopted a proactive fiscal policy and a moderately easy monetary policy, introduced ten measures to shore up domestic demand and put in place a series of related policies. Together, they make up a systematic and comprehensive package plan aimed at ensuring steady and relatively fast economic growth.
First, substantially increase government spending and implement a structural tax cut. The Chinese Government has rolled out a two-year program involving a total investment of RMB 4 trillion, equivalent to 16 percent of China’s GDP in 2007. The investment will mainly go to government-subsidized housing projects, projects concerning the well-being of rural residents, railway construction and other infrastructural projects, environmental protection projects and post-earthquake recovery and reconstruction. Some of them are identified as priority projects in China’s 11th Five-Year Plan for Economic and Social Development. The rest are additional ones to meet the needs of the new situation. This two-year stimulus program has gone through scientific feasibility studies and is supported by a detailed financial arrangement. RMB 1.18 trillion will come from central government’s budget, which is expected to generate funds from local governments and other sources. The Chinese Government has also launched a massive tax cut program which features the comprehensive transformation of the value-added tax, the adoption of preferential tax policies for small and medium-sized enterprises (SMEs) and real estate transactions, and the abolition or suspension of 100 items of administrative fees. It is expected to bring about a total saving of RMB 500 billion for businesses and households each year.
Second, frequently cut interest rates and increase liquidity in the banking system. The central bank has cut deposit and lending rates of financial institutions five times in a row, with the one-year benchmark deposit and lending rates down by 1.89 percentage points and 2.16 percentage points respectively. Thus the financial burden of companies has been greatly reduced. The required reserve ratio has been lowered four times, adding up to a total reduction of 2 percentage points for large financial institutions and 4 percentage points for small and medium-sized ones. This has released around RMB 800 billion of liquidity and substantially increased funds available to commercial banks. A series of policy measures have been adopted in the financial sector to boost economic growth, including increasing lending, optimizing the credit structure, and providing greater financial support to agriculture and the SMEs.
Third, implement the industrial restructuring and rejuvenation program on a large scale. We are seizing the opportunity to push ahead comprehensive industrial restructuring and upgrading. To this end, plans are being drawn up for key industries such as automobile and iron and steel, which not only focus on addressing the immediate difficulties of enterprises but also look toward their long-term development. We have taken strong measures to facilitate the merger and reorganization of enterprises, phase out backward production capacity, promote advanced productive forces, and improve industry concentration and the efficiency of resource allocation. We encourage our enterprises to upgrade technologies and make technological renovation. We support them in making extensive use of new technologies, techniques, equipment and materials to restructure their product mix, develop marketable products and improve their competitiveness. Our financial support policies are being improved, a sound credit guarantee system installed and market access eased for the benefit of SME development.__________________
China’s 50 year plan is still on track. The US still has the world’s very best institutions of learning. But once one gets a degree, what use is it if one can’t get a job? When I worked at Rensselaer Polytech in NY, 99% of the graduate students in the computer chip fab research center were foreigners. Some were from Euorpe but most were from all over Asia. We had exactly one American student. Japan built high-tech auto factories in the US but this was a naked attempt at preventing US politicians from hammering Japan over the cheap yen. But China, as Wen points out, has cheap labor that is also very well educated. And the goal is to be a top auto producer who will challenge not only the dying US business but also resurgent Japan.
The plan in China is for most autos to be made in China, not the US or Japan. Japan spends huge amounts of money, shipping cars all over the planet. But the flow to China will fade over the next 20 years. Now, we keep forgetting something here: China was a third world country a mere 10 years ago. Still is 80% third world today. Chinese labor is cheap. Japan, on the other hand, is not a third world country. Hasn’t been one for many years. Japan exports cars built in Japan thanks to the artificially cheap yen.
Since 2000, Japan has experimented with a new system: returning the majority of Japanese to third world status as cheap, disposable labor. This program is now going on in the US, itself. So, as China moves up the industrial scale, the US and Japan are meeting China halfway on the way down. Even so, during the next 25 years, the Chinese, without currency manipulations, will still undercut US and Japanese wages and profits. Much of China’s vast sovereign wealth funds will flow towards industrializing and meshing engineering prowess with manufacturing skills. Below is a video of Wen’s speech at Davos:
Chinese Premier Wen Jiabao speaks at the World Economic
Forum annual meeting, in Davos, Switzerland, on Jan. 28,
Fourth, actively encourage innovation and upgrading in science and technology. We are speeding up the implementation of the National Program for Medium- and Long-Term Scientific and Technological Development with a special focus on 16 key projects in order to make breakthroughs in core technologies and key generic technologies. This will provide scientific and technological support for China’s sustainable economic development at a higher level. We are developing high-tech industrial clusters and creating new social demand and new economic growth areas. Fifth, substantially raise the level of social security.
We have accelerated the improvement of social safety net. We will continue to increase basic pension for enterprise retirees and upgrade the standard of unemployment insurance and workers’ compensation. We will raise the level of basic cost of living allowances in both urban and rural areas, welfare allowances for those rural residents without family support and the special allowances and assistance to entitled groups. This year, the central budget for social security and employment will increase at a much higher rate than the growth of the overall fiscal revenue.
We are advancing the reform of the medical and health system and working to put in place a nationwide basic medical and health system covering both urban and rural areas within three years and achieve the goal of everyone having access to basic medical and health service. It is estimated that governments at all levels will invest RMB 850 billion for this purpose. We give priority to education and are now working on the Guidelines of the National Program for Medium- and Long-Term Educational Reform and Development.
This year, we will increase public funds for compulsory education in rural areas, offer more financial support to students from poor families and improve the well-being of middle and primary school teachers so as to promote equity in education and optimize the educational structure. We are using every possible means to lessen the impact of the financial crisis on employment.
We are following a more active employment policy. In particular, we have introduced various policy measures to help college graduates and migrant workers find jobs and provided more government-funded jobs in public service. These major policy measures as a whole target both symptoms and root causes, and address both immediate and long-term concerns. They represent a holistic approach and are mutually reinforcing. They are designed to address the need to boost domestic demand, readjust and reinvigorate industries, encourage scientific innovation and strengthen social security. They are designed to stimulate consumption through increased investment, overcome the current difficulties with long-term development in mind, and promote economic growth in the interest of people’s livelihood. These measures can mobilize all resources to meet the current crisis.
China’s economy is in good shape on the whole. We managed to maintain steady and relatively fast economic growth in 2008 despite two unexpected massive natural disasters. Our GDP grew by 9 percent. CPI was basically stable. We had a good grain harvest for the fifth consecutive year, with a total output of 528.5 million tons. Eleven million and one hundred and thirty thousand new jobs were created in cities and towns. Household income in both urban and rural areas continued to rise. The financial system functioned well and the banking system kept its liquidity and credit asset quality at a healthy level. When China, a large developing country, runs its affairs well, it can help restore confidence in global economic growth and curb the spread of the international financial crisis. It will also help increase China’s imports and outbound investment, boost world economic growth and create more development and job opportunities for other countries. Steady and fast growth of China’s economy is in itself an important contribution to global financial stability and world economic growth__________________
China is so set on this program, Wen keeps talking about it. The US talks about these things but only very vaguely. It has been almost 5 years since I had to stop working due to my husband’s illness and I am certain, during this time, the ratio of Americans to aliens studying manufacturing technology has continued to be totally warped. A country that gives up its tools gives up its right to be called ‘homo sapiens’. And we are giving up all our tools. One by one.
Recently, a machinist at Boeing emailed me and said, the average age of a machinist there is over 55 years old. And once these geezers retire, that is the end of it. Bang. They are not training anyone to take over. It is all being phased out, quietly. To Japan and China.
Ladies and Gentlemen,
Will China’s economy continue to grow fast and steadily? Some people may have doubts about it. Yet I can give you a definite answer: Yes, it will. We are full of confidence. Where does our confidence come from? It comes from the fact that the fundamentals of China’s economy remain unchanged. Thanks to our right judgment of the situation and prompt and decisive adjustment to our macroeconomic policy, our economy remains on the track of steady and fast development. Our package plan takes into consideration both the need to address current difficulties and that of long-term development. It is beginning to produce results and will be more effective this year. Our confidence comes from the fact that the long-term trend of China’s economic development remains unchanged.
We are in an important period of strategic opportunities and in the process of fast industrialization and urbanization. Infrastructure construction, upgrading of industrial and consumption structures, environmental protection and conservation projects, and various social development programs–all can be translated into huge demand and growth potential and will bolster relatively high-speed growth of our economy for a long time to come. Our confidence also comes from the fact that the advantages contributing to China’s economic growth remain unchanged. With 30 years’ of reform and opening-up, we have laid a good material, technological and institutional foundation.
We have a large well-trained and relatively low-cost labor force. We have a healthy fiscal balance, a sound financial system and adequate funds. Our system enables us to mobilize the necessary resources for big undertakings. There is harmony and stability in our society. What is more important, we follow a scientific approach to development which puts people first and seeks comprehensive, balanced and sustainable development. We are committed to reform, opening-up and win-win progress. We have found the right development path in line with China’s national conditions and the trend of our times. Our people are hard-working, persevering and resilient. It is precisely these fine qualities that endow China, a country with a time-honored history, with greater vitality in the face of adversities.
At the same time, there is no fundamental change in the external environment for China’s economic growth. The pursuit of peace, development and cooperation is the irreversible trend in today’s world. The readjustment to the international division of labor offers new opportunities. We have the confidence, conditions and ability to maintain steady and fast economic growth and continue to contribute to world economic growth.
Ladies and Gentlemen,
The global financial crisis is a challenge for the whole world. Confidence, cooperation and responsibility are key to overcoming the crisis. Confidence is the source of strength. The power of confidence is far greater than what can be imagined. The pressing task for the international community and individual countries is to take further measures to restore market confidence as soon as possible. In times of economic hardships, confidence of all countries in the prospect of global economic development, confidence of leaders and people around the world in their countries, confidence of enterprises in investment and confidence of individuals in consumption are more important than anything else. In tackling the crisis, practical cooperation is the effective way. In a world of economic globalization, countries are tied together in their destinies and can hardly be separated from one another. The financial crisis is a test of the readiness of the international community to enhance cooperation, and a test of our wisdom.
Only with closer cooperation and mutual help, can we successfully manage the crisis. To prevail over the crisis, accepting responsibilities is the prerequisite. When governments fulfill their responsibilities with resolution and courage, they can help maintain a stable financial order and prevent the crisis from causing more serious damage on the real economy. Political leaders must be forward-looking. They should be responsible to the entire international community as well as to their own countries and people. It is imperative that we implement the broad agreement reached since the G20 Summit on Financial Markets and the World Economy. We should not only take more forceful and effective steps to tide over the current difficulties, but also push for the establishment of a new world economic order that is just, equitable, sound and stable. To this end, I would like to share with you the following ideas.
First, deepen international economic cooperation and promote a sound multilateral trading regime. Past experience shows that in crisis it is all the more important to stick to a policy of opening-up and cooperation. Trade protectionism serves no purpose as it will only worsen and prolong the crisis. It is therefore necessary to move forward trade and investment liberalization and facilitation. China firmly supports efforts to reach balanced results of the Doha Round negotiations at an early date and the establishment of a fair and open multilateral trading regime. As an important supplement to such a trading regime, regional economic integration should be vigorously promoted.__________________
China is very determined to keep up this free trade business. And why not? It benefits them! I can’t blame Wen or Hu for wanting this. If I were ruling China, I would also be intent on doing this. If I ruled the US, I would be fighting this tooth and nail, of course. Remember when Putin talked about ‘A New World Order.’? Well, here is Wen, echoing him! The new order isn’t one that is a pyramid with the US at the top, using paper money to hog a quarter of the world’s resources. No, Wen mentions the word, ‘equitable.’ This means, China gets nearly a quarter of the world’s resources, not 3%. This means, the US either has to find another planet to exploit or we live with a lot less than we use today. Meaning, oil and food, just to name two important commodities.
Ad celebrating the year of the Ox from the forum which has this transcript.
Second, advance the reform of the international financial system and accelerate the establishment of a new international financial order. The current crisis has fully exposed the deficiencies in the existing international financial system and its governance structure. It is important to speed up reform of the governance structures of major international financial institutions, establish a sound global financial rescue mechanism, and enhance capacity in fulfilling responsibilities. Developing countries should have greater say and representation in international financial institutions and their role in maintaining international and regional financial stability should be brought into full play. We should encourage regional monetary and financial cooperation, make good use of regional liquidity assistance mechanisms, and steadily move the international monetary system toward greater diversification.
Third, strengthen international cooperation in financial supervision and regulation and guard against the build-up and spread of financial risks. Financial authorities around the world should step up information sharing and the monitoring of global capital flows to avoid the cross-border transmission of financial risks. We should expand the regulation coverage of the international financial system, with particular emphasis on strengthening the supervision on major reserve currency countries. We should put in place a timely and efficient early warning system against crisis. We should introduce reasonable and effective financial regulatory standards and improve oversight mechanisms in such areas as accounting standards and capital adequacy requirements. We should tighten regulation of financial institutions and intermediaries and enhance transparency of financial markets and products.
Fourth, effectively protect the interests of developing countries and promote economic development of the whole world. The international community, developed countries in particular, should assume due responsibilities and obligations to minimize the damage caused by the international financial crisis on developing countries and help them maintain financial stability and economic growth. International financial institutions should act promptly to assist those developing countries in need through such measures as relaxing lending conditions. We should advance the international poverty reduction process and scale up assistance to the least developed countries and regions in particular with a view to building up their capacity for independent development.
Fifth, jointly tackle global challenges and build a better home for mankind. Issues such as climate change, environmental degradation, diseases, natural disasters, energy, resources and food security as well as the spread of terrorism bear on the very survival and development of mankind. No country can be insulated from these challenges or meet them on its own. The international community should intensify cooperation and respond to these challenges together.
I want to reaffirm here China’s abiding commitment to peaceful, open and cooperative development. China is ready to work with other members of the international community to maintain international financial stability, promote world economic growth, tackle various global risks and challenges, and contribute its share to world harmony and sustainable development.
Ladies and Gentlemen,
The harsh winter will be gone and spring is around the corner. Let us strengthen confidence and work closely together to bring about a new round of world economic growth.
The Wall Street Journal claims that China didn’t mention a new fiat currency. Putin talked about this earlier. But China makes it totally clear, they want regional currency regimes that do not use the dollar. This is a revival of the Co-prosperity Sphere first proposed by Japan and then enforced via tremendous brutality, by Japan. In this case, Japan is in the back seat and China is the driver. Wen also mentions stepping up the supervision of present reserve currencies which is the dollar, of course. In this speech, he also mentions the need for countries to protect their borders from funny money flooding the systems.
This refers to the Japanese carry trade which gave out loans to foreign entities who then used these to spend money in host countries. This flooded the planet with epic amounts of funny money. And the Chinese are sick and tired of this. This economic melt down is hammering Japan very hard. The Chinese hope this lesson will sting enough to cause Japan to hesitate, restarting the carry trade.
Valerie Jarrett, a top aide to Barack Obama, told delegates at the World Economic Forum on Thursday that the new U.S. Administration is committed to taking “aggressive and extraordinary action” to revive the U.S. economy. While Jarrett spoke about Obama’s desire to take a more coordinated global approach on issues such as climate change, her short speech disappointed a number of participants for its sweeping rhetoric and lack of specificity.
“Terribly boring,” said one European CEO, who compared her remarks to a “U.S. campaign speech”. Added another executive: “I’m trying to think of a single thing in there that I didn’t already know.” Jarrett’s rhetoric was especially unsatisfying for those who had listened to the assertive and more detail-oriented comments of Chinese premier Wen Jiabao and Russia’s Vladimir Putin a day earlier.
One issue, perhaps, is that global leaders are already acutely aware of both Obama’s message and his background. And yet Jarrett spent much of her time talking about Chicago and quoting from Obama’s Inaugural Address. We did learn that Obama met Wednesday with companies such as IBM, Xerox, Citibank and Google. But what they talked about, other than broad support for a recovery plan, was left unsaid.
This story is in contrast with the speeches and actions of Putin and Wen. The US is being hammered at Davos. Yet, our response is to belch election talking points? Don’t they have anyone with the wit to talk back? After all, the main threads here seems to be this: the world needs a new order and that order will come from Russia and China. We need to make some sort of response!
Worse, the Europeans were bored by the Jarrett speech. Oh, mon Dieu! The worst swipe of them all. As for the US meetings with US corporations that are rapidly moving everything to China: HAHAHA. By the way, I had to report my local cell phone tower is out due to the ice storm. Had a lot of fun talking to a nice lady in….India. Her English skills were slender, at best. We managed to communicate. But this is the whole problem: all US jobs are flowing out of the US and we are going bankrupt. Sure, things are cheaper. But then, all third world countries feature cheap stuff. We shouldn’t want that, should we? After all, aren’t we #1?
Geithner’s Yuan Call Rejected as ‘Horrible Advice’
U.S. Treasury Secretary Timothy Geithner’s call for China to loosen restrictions on its currency was criticized by economists and policy makers at the World Economic Forum.
Allowing the yuan to strengthen would be “economic suicide” amid an economic slump, Stephen Roach, Morgan Stanley’s Asia Chairman, told a panel in Davos, Switzerland, yesterday. “I’ve never seen an economy in recession voluntarily raise their currency. It’s horrible advice.”
Renewed clashes over the yuan threaten to stoke tension between two of the world’s biggest economies and undermine cooperation to counter the global recession. China limited yuan gains against the dollar in July 2008 after the currency rose 21 percent following the end of a peg three years earlier.
Geithner is in his new office for just one week and already is putting his foot in his mouth. The Chinese were so irritated by him, they nearly put the US name in the speech by Wen. But he kept his temper and only called us ‘some countries…’ Below is another Wen speech from a very important regional meeting a month ago:
To Deepen Cooperation and Work Together to Overcome Current Difficulties
On December 13, 2008, Wen Jiabao, Premier of the State Council of China, shared his views on the cooperation among the three countries and the efforts made by China for the maintenance of regional economic and financial stability at the press conference of China-Japan-ROK Summit.
Wen said that China, Japan and the Republic of Korean (ROK) are close neighbors and countries with important influence in East Asia. Peace, amity, cooperation and development are not only the common aspirations of the people of the three countries, but also required for the stability and prosperity in the region. The leaders issued the Joint Statement for Tripartite Partnership, which established a tripartite partnership among the three countries. The leaders agreed to regularize the ‘stand-alone’ meeting of the leaders of the three countries, which is of great significance and symbolizes that the trilateral cooperation has entered a new stage of development. The next summit will be held in China next year. As the successive coordinator for the trilateral cooperation, China is ready to work together with Japan and the ROK to promote cooperation among the three countries for greater progress.
Wen said that the current financial crisis continues to spread, having increasingly greater impact on the world economy. China, Japan and the ROK are important economic players in Asia and the world, thus together we should strive to respond to the once-in-a-century crisis. We should step up our dialogue on macroeconomic policies and promote economic cooperation in East Asia and take concrete measures to facilitate investment and trade. We should oppose trade protectionism. This should contribute to financial stabilization and economic growth of the region and the world and thus play a positive role in enhancing the confidence of the region and the world in dealing with the financial crisis.
Wen Jiabao pointed out that the cooperation among the three countries is an integral part of the East Asian regional cooperation and is a type of open cooperation based upon mutual benefits. The trilateral cooperation also complements, promotes and supports other regional cooperation mechanisms such as East Asian cooperation mechanism so as to share development opportunities and provide greater space for cooperation. With the joint statement on trilateral cooperation in disaster management and the action plan for China-Japan-ROK cooperation in the coming two to three years, we have added further substance to the trilateral cooperation and thus will inject new vitalities to the East Asian regional cooperation. Thus, the promotion of our cooperation is in the interest of not just the three countries but also of the countries in East Asia in general.
Wen stressed that strengthening bilateral cooperation is the foundation and guarantee for the trilateral cooperation. With Prime Minister Aso, and also with President Lee, I had bilateral meetings today. We had very candid and in-depth exchanges of views on matters of common interest and bilateral relations, which enhanced our consensus and increased our mutual trust. I would like to once again say that from the long-term perspective and from the basis of strategic interest, the Chinese side attaches importance to further developing cooperation with both Japan and the ROK, and attaches importance to the friendships between the people of China and Japan, and China and the ROK. I am convinced that so long as we respect each other, treat each other as equal partners, seek common ground while put aside differences, and work together on a mutually beneficial basis, we will be able to develop a stable partnership among the three countries and thus bring greater welfare to the people of the three countries, and make even greater contributions to the development and peace of the region.
Wen also briefed the guests on the measures recently taken by China to expand domestic demand and maintain stable and rapid economic growth. Wen said that China is adopting various measures to expand domestic demand and maintain stable and rapid economic growth. This will play an important and positive role in maintaining the economic and financial stability in the region. We made timely adjustment to the macro-economic policies, implemented the proactive fiscal policy and moderately relaxed monetary policy, and resolutely issued 10 measures to stimulate domestic demand. We will invest 4 trillion yuan in the coming two years with the emphasis on housing projects for low-income urban residents, projects aiming to improve rural wellbeing, health, education, and culture. We shall strengthen infrastructure development projects in such areas as water management, railways, highways, and airports. We shall reduce CO2 emissions, and work on energy savings, ecological improvement and post-disaster construction. To implement the policy of expanding domestic demand, we have developed 9 specific tasks on financial support to economic growth, including ensuring liquidity for banks and increasing lending to SMEs. We have adopted 6 measures in support of the textile industry. We have developed rejuvenation plans for 9 sectors including energy, metallurgy, machinery and the petrochemical industry, with emphasis on technological innovation, structural adjustment and mergers and acquisitions,. We also strived to promote electrification of rural areas by providing financial subsidiaries for farmers so that they will be able to purchase home appliances and farming equipment. We shall reduce the tax payment of enterprises and residents by up to 500 billion yuan through various measures aiming to reform the tax and fee system. We shall promote healthcare reform to reduce the medical care burdens of residents. We shall increase farmers’ income and improve the pay for teachers in primary and middle schools. We shall increase the basic pension of the retired. We shall also improve the system of minimum social security in urban and rural areas. By adopting these measures we believe that we will be able to contribute to expanding domestic demand, promoting economic growth and social development, and improving the welfare of the people. China is the largest export market in East Asia, and we accept about US$500 billion of goods within the region every year. We shall maintain stable and rapid economic growth, maintain robust demands for imports, and maintain our external investment capabilities. If we can do this we shall be able to provide greater opportunities for cooperation and development for countries within the region, and also provide greater job opportunities for our trade partners. That is also what we have been stressing. Thus, maintaining stable and rapid growth of the Chinese economy will make important contributions to the financial stability of the world and the region’s economic growth.
Wen said that China is addressing the financial crisis hand in hand with the East Asian countries. At the ASEM meeting, the leaders of East Asian countries engaged in an in-depth exchange of views on the financial crisis. We shall promote the regional monetary and financial cooperation including the Chiang Mai Initiative (CMI multilateralization) and the Asian Bond Markets Initiative (ABMI). China, in cooperation with other countries concerned, has been working on establishing bilateral currency exchange mechanisms and further expanding the swap scale. These measures should contribute to strengthening the confidence of these countries in overcoming the crisis, allaying the difficulties faced by countries concerned to a certain extent, and regaining confidence of international investors in the region.
Wen said that China is also working on promoting the development of the real economy in the region and effectively improving the capabilities of countries to withstand risks. We are utilizing the regional cooperation mechanisms such as the East Asian cooperation mechanism and China-Japan-ROK cooperation mechanism to step up the economic and trade cooperation among the countries in the region. We shall support and help ASEAN to narrow down the development gaps. We shall accelerate the construction of infrastructure, strengthen cooperation in agriculture, and promote bilateral and multilateral FTAs so as to increase the economic vigor and the driving force of growth in the region. We believe that we shall be able to allay the shocks of the financial crisis on the real economy if we can increase the economic growth capabilities of the countries in the region.
Wen Jiabao stressed that in the face of the grave financial crisis, China is taking a responsible attitude in dealing with the current crisis. Together with East Asian countries, China will actively respond to various crises and challenges and should like to achieve mutual benefits in the process of cooperation.
The rest of Asia is now on China’s side in this business. Even Japan has figured out, it can’t keep giving the US free loans forever. Eventually, we hit a natural ceiling. The only real future market Japan can sell to is other Asian markets. And this year, sales in Asia were greater than sales to the US. So slowly, Japan will turn away and move towards China. Especially if we repudiate a trillion dollars and half a trillion in Treasuries held by the Japanese government. China is expanding domestic demand. Japan wants to service this demand. End of story.
Washington souvenirs worth $100,000 — including images of the Capitol dome and printings of the U.S. Constitution — are locked in storage, blocked from sale in the new U.S. Capitol Visitors Center because the items are made in China.
Rep. Bob Brady, D-Pennsylvania, chairman of the House Administration Committee, said he warned operators of the visitors center not to purchase merchandise made outside the United States, but they did it anyway.
And this story is so pathetic! Pray tell, who is making these tchatshkes? The ‘little goofy things for cheap’ market is ‘Made in China.’ Feh.
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