Agency warns downturn deepening
27-11-2008
China's top economic planning agency has warned that the downturn in the economy is deepening as the global financial crisis spreads, foreshadowing rising unemployment and social unrest. The warning came a day after the People's Bank of China made its biggest interest rate cut in 11 years. During a news conference in Beijing, the chairman of the National Development and Reform Commission, Zhang Ping, said the mainland economy faced growing downside pressure, owing to dramatic changes in the global financial outlook. The State Information Centre, a government think-tank, has predicted that annual economic growth will slow to 8 percent this quarter from 9 percent in the third quarter due to weakness in exports and a slump in the property market. But Mr Zhang said some domestic economic indicators in November would point to an accelerated slowdown. And he warned that excessive bankruptcies and production cuts would lead to massive unemployment, stirring social unrest. He said the mainland would adopt ever more forceful and effective measures to combat the slowdown, adding that Wednesday's "aggressive" interest rate cut was part of the effort. Mr Zhang also gave a break down of how the four trillion yuan stimulus package would be spent. One-point-eight trillion yuan will go directly for the construction of railways, roads and airports. He said Beijing would introduce further measures to boost private-sector demand and employment, including subsidies aimed at low-income households.
