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Premier focuses on stabilizing growth

By Li Jiabao, Diao Ying and Qiu quanlin (China Daily)

08:08, July 11, 2012

Premier Wen Jiabao, faced with challenging GDP figures, met with economists and business leaders on Monday and Tuesday to discuss ways to boost growth.

Second-quarter GDP growth, expected to be released later this week, is predicted to be around 7.6 percent year-on-year.

Maintaining growth will be the "top priority", the premier said.

"A stable growth rate is not only imperative today, but also a long-term commitment," he said.

Wen pointed out that as a large developing country, China needs to maintain a certain growth to provide adequate support for development and improve the standard of living.

An annual GDP target of 7.5 percent was set earlier this year, down from 9.2 percent in 2011 and 10.4 percent in 2010. But economists say once GDP growth is below 7.5 percent, a large number of jobs may be threatened.

At the moment, Wen said, some "reasonable increase in investment" is more important than, among other things, providing consumer incentives and diversifying exports.

GDP growth has traditionally been driven by government-led investment in fixed assets, consumer spending and exports.

However, he stressed that new investment must be diverted to projects that contribute to improving the overall economy.

He promised more funds for new technology and industries which show strong potential despite sluggish demand.

Company tax structures will also be reviewed, he said.

Rail, public utilities, energy, telecoms, medical services and education will also be open to capital investment.

Investor confidence must be boosted, the premier said.

In a further development, foreign trade fell back to single-digit growth in June. This follows double-digit growth in May and fuels concern about meeting the annual trade growth target of 10 percent.

Trade with the European Union and Japan showed practically no growth, Zheng Yuesheng, spokesman for the General Administration of Customs, said on Tuesday.

Foreign trade expanded 9 percent year-on-year in June, in contrast with 14.1 percent in May.

Exports rose 11.3 percent, down from 15.3 percent in May. Imports rose just 6.3 percent in June against 12.7 percent in May.

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