Premier Wen Jiabao said Tuesday he was deeply worried about the world economy, vowing to take flexible and prompt measures amid the changing economic environment.
"I myself watch very closely the development in the world economy and the U.S. economy, and I'm deeply worried," said Wen at a press conference after the annual session of the National People's Congress (NPC), the top legislature.
He attributed the recent fluctuations of world stock markets to the U.S. sub-prime crisis, which led to the depreciation of the U.S. dollar and interest rate cuts by the U.S. government, as well as high international oil prices.
"What concerns me now is that the U.S. dollar is depreciating continuously, when the U.S. dollar will reach the bottom in this depreciation process, what kind of monetary policy the U.S. government will adopt and where the U.S. economy is heading." said Wen.
He said China's monetary and fiscal policies were based on the country's own reality but the government would keep close eyes on latest world economic trends and make flexible, prompt reactions to future changes.
"China's economy is already tied to the globalized economy," said Wen. "All kinds of changes and fluctuations in the international economy will inevitably be reflected on China's own economy."
China has adopted a tight monetary policy and prudent fiscal policy to address the excessive growth rate of investment, money supply, credit and trade surplus, said Wen.
The effects of the government's economic policies would only be seen in the mid-term and long-term context, not within a short span of one or two months, said Wen.
Chinese share prices continued losing on Tuesday morning, as the benchmark Shanghai Composite Index fell 68.21 points, or 1.79 percent, to 3,751.84 after a 3.6-percent plunge on Monday amid lingering concerns over possible interest-rate hikes and panic from the U.S. sub-prime mortgage woes.
(Xinhua News Agency March 18, 2008)