Meeting the Challenges: A Historical Record of China’s Development—Speeches by Wen Jiabao at the World Economic Forum Events

2. Premier Wen Answers Questions at the Opening Ceremony

77 PREMIER WEN ANSWERS QUESTIONS AT THE OPENING CEREMONY (28 January 2009, Davos) On 28 January 2009, Premier Wen Jiabao attended the opening ceremony of the 2009 Annual Meeting of the World Economic Forum in Davos, and answered questions from Klaus Schwab, Executive Chairman of the World Economic Forum. Schwab: There has been much speculation about China’s growth rate in 2009, and there are different forecasts. Could you share with us your opinion and what the minimum growth rate should be in order to maintain social coherence in your country? Wen Jiabao: As we all know, the international financial crisis has negatively affected China’s economy. Last year, China’s economy grew at an annual rate of 9.6 percent, but the growth rate in the fourth quarter was only 7.6 percent. China’s economy now faces mounting downward pressures. With this situation in mind, we have set a growth rate target of about 8 percent for MeetingTheChallengesEN_FA02_17Dec2013.indd 77 MeetingTheChallengesEN_FA02_17Dec2013.indd 77 19/12/13 11:26 AM 19/12/13 11:26 AM MEETING THE CHALLENGES 78 2009.1 We believe that it was necessary to set this target, which can be met through hard work. To be frank, to achieve an 8 percent growth rate this year will be very difficult. But with hard work we will be able to attain this goal. Let me tell you why. China’s financial system is quite stable, and the figures speak for themselves. The direct impact of the global financial crisis on China’s financial system has been limited. Due to the reform of China’s financial system, and particularly due to the establishment of a modern banking sector, the ratio of the non-performing loans of the major Chinese banks is only 2.5 percent,2 and their capital adequacy ratios are all over 8 percent as required by the Basel Accord.3 Let me give you one more example. Since late last December, we have seen signs of an economic recovery in China. These signs have just emerged, but they are encouraging. For example, loans issued in China last November increased by 400 billion yuan. The figure reached 700 billion yuan in December and rose to 900 billion yuan in the first twenty days of January of this year. The prices of major industrial products have rebounded. Business inventories and backlogs of goods at Chinese ports have been reduced. Last December, the output value of Chinese factories with annual sales of over five million yuan increased by 0.3 percent over the previous month. With falling prices, consumption has grown at a rate of 20–21 percent. During the Chinese New Year, consumption grew by 21 percent over the same period of the previous year. China has massive savings of about 46 trillion yuan, of which 20 trillion yuan are individual savings. Because China is still undergoing industrialization and urbanization, there is a gap between the rural and urban areas and among the various regions. If you visit China’s rural areas, you will see that there is an insatiable demand there. To achieve the growth target we have set, we must take prompt, forceful, MeetingTheChallengesEN_FA02_17Dec2013.indd 78 MeetingTheChallengesEN_FA02_17Dec2013.indd 78 19/12/13 11:26 AM 19/12/13 11:26 AM 2009 ANNUAL MEETING OF THE WORLD ECONOMIC FORUM 79 targeted, and effective steps to resolve problems as they emerge. Thank you. Schwab: Premier Wen, I have another question. You have included climate change in the areas that require international cooperation. Climate change will be a major issue during our meetings here. Can you enlighten us as to how China will contribute to solving or to alleviating the global challenge of climate change internationally? Wen Jiabao: China is a party to the United Nations Framework Convention on Climate Change and the Kyoto Protocol. We take climate change very seriously, and we will continue to play our part in addressing the issue of climate change. In drawing up the Eleventh Five-year Plan for Economic and Social Development, we set mandatory targets for saving energy and reducing pollution. During the Eleventh Fiveyear Plan period, per unit GDP of energy consumption will be cut by 4 percent annually, which will amount to 20 percent within five years. During this period, the demand for chemical oxygen will be cut by 2 percent annually and by 10 percent within five years. Due to three years...