by Staff Writers
Beijing (AFP) May 23, 2012
China's government on Wednesday stressed the need to make growth a priority as it warned that the world's number two economy faces "increasing downward pressure".
Measures "to increase domestic demand and stimulate consumption" were required, said a statement posted on the government website after a meeting of the State Council, China's cabinet, headed by Premier Wen Jiabao.
Those steps needed to be "more focused, flexible and taken further upstream", the leadership in Beijing said.
The World Bank in a report Wednesday said China faces the challenge of preventing an excessively abrupt slowdown as economic growth continues to ease this year.
"While the prospects for a gradual slowdown remain high, there are concerns that growth could slow too quickly. However, sufficient policy space exists to respond to downside risks," the bank said.
The World Bank predicted that the Chinese economy will expand by 8.2 percent in 2012, down from 9.2 percent in 2011 and 10.4 percent in 2010.
Concerns over slowing growth have intensified after weak economic data for April was released last week. Growth in industrial production, imports, exports, fixed-asset investment and bank lending all slowed.
Since then, Beijing has lowered the amount of money that banks are required to hold in their coffers, and economists predict more measures to come.
The Chinese government has set a growth target of 7.5 percent for 2012, mainly in a bid to keep unemployment under control and avoid social unrest.
The World Bank said China has the means to boost fiscal spending, but it should go easy on the kind of massive infrastructure spending that characterised its response to the crisis in 2008.
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