The Chinese prime minister has said the country is facing unprecedented difficulties in the face of the global financial crisis. However, Wen Jiabao said the government was still aiming for 8% growth this year backed by a massive stimulus package.
International stock markets had rallied strongly yesterday on rumours that Prime Minister Wen Jiabao would unveil a second stimulus package in his address to the National People's Congress.
While no second stimulus plan was forthcoming, he did give further details of the €470 billion package that China is is investing to try to make up for the fall in its exports.
Wen's assessment of the situation was blunt. The global crisis continues to spread and get worse he said, and demand in continuing to shrink.
But he said China would ride out the recession, and repeated the country's target of 8% economic growth. That is the minimum the leadership thinks is needed to avoid social unrest because of unemployment.
Most of China's stimulus package will focus on infrastructure but there is also an increase in social spending to try to persuade the Chinese public to spend rather than save.
