Chinese Premier Wen Jiabao said the government will maintain its fiscal and monetary policies as the economic recovery isn’t stable yet and faces many “uncertainties.”
Authorities can’t be “blindly” optimistic as a “decline in external demand may continue for a longer time” and excess production capacity may restrain industrial growth, Wen was quoted as saying on the government’s official Web site today.
China has yet to cement a recovery as factories have too much capacity and exports are weakening, officials said this month. China is using a 4 trillion yuan ($586 billion) government stimulus plan to help revive growth. The central bank scrapped lending quotas in November and has kept interest rates at a four-year low, triggering an explosion in credit.