Wen called for faster reform of international financial institutions and for a new world order to run the global economy and greater help for developing countries.
DAVOS, Switzerland (AFP) — Chinese Premier Wen Jiabao on Wednesday set an ambitious 2009 growth target to maintain China’s social stability and said the United States must cooperate more in the battle against the global economic crisis.
Speaking on the first day of the World Economic Forum in the Swiss mountain resort of Davos, the Chinese leader shared the general gloom that has taken over the political and business elite.
He said the crisis had hit China with “severe challenges,” including rising unemployment caused by the collapse of export markets such as the United States.
While the International Monetary Fund on Wednesday predicted China’s economy would grow by 6.7 percent in 2009, well below its average of recent years, Wen said 8.0 percent was needed to guarantee social stability, long a main concern of the government.
“We think we must maintain growth at 8.0 percent this year. This is necessary and can be managed through hard work,” Wen said in answer to a question from forum founder Klaus Schwab on stability in China.
“To be honest, it will be a tall order to achieve a growth rate of 8.0 percent in 2009 but I am sure it can be attained with hard work,” Wen said.
The Chinese premier called on new US President Barack Obama to step up cooperation in the fight against the turmoil. Tensions have risen recently with new US Treasury Secretary Timothy Geithner saying Obama believes China manipulates its currency to gain an edge in trade.
“In meeting the international financial crisis, it is imperative for the two countries to enhance cooperation, that is my message to the US administration,” Wen said.
Three decades of formalised ties between the United States and communist China had shown that “a peaceful and harmonious relationship will make both sides winners, while a confrontational will leave both losers,” he added.
During a speech Wen blamed the crisis on the “blind pursuit” of profit and “inappropriate macroeconomic policies of some economies and their unsustainable model of development” in a veiled attack on the United States.
Wen called for faster reform of international financial institutions and for a new world order to run the global economy and greater help for developing countries.
He was followed at the forum by Russian Prime Minister Vladimir Putin, whose country’s economy has also been hit hard by the crisis.
Germany’s Chancellor Angela Merkel and the British and Japanese prime ministers Gordon Brown and Taro Aso — who have between them spent hundreds of billions of dollars battling the crisis — were also among about 40 heads of state or government who will speak this week.
But with much attention on Obama’s efforts to get a 825 billion dollar (621 billion euro) stimulus package through Congress and grim new IMF predictions for the world economy, the forum is one of the gloomiest ever held.
A lot of top bankers are staying away from the event because they have lost their jobs in the crisis or are suffering from cutbacks. But there is still a record attendance, and there were plenty of critics of measures taken.
South Africa’s Finance Minister Trevor Manuel said wealthy nations appeared to be adopting a “lemming-like approach, trying to get to the precipice without knowing what their money would buy.” He said there was a real risk developed countries would come out of the crisis with massive debts.
“The crisis is getting worse,” said the News Corp media tycoon Rupert Murdoch. “It’s going to take drastic action to turn it around, if it can be turned around quickly. Personally, I believe it will take some time.”
He added: “The great majority of the people in the world are depressed and traumatised by the fact that their savings, the wealth in their homes or pension funds … a big percentage of it has disappeared.”
Davos delegates also saw new signs that the battle against the worst recession since the Great Depression of the 1930s was becoming ever tougher.
Confidence among chief executives at more than 1,100 top companies around the world has “plummeted”, according to a survey by consultants PricewaterhouseCooper released in Davos.
“The speed and intensity of the recession has rocked the psyches of CEOs and created a global crisis of confidence,” commented PwC chief executive Samuel DiPiazza.
The economic storm has overshadowed attempts to highlight other key issues ranging from conflict and climate change to efforts to spread democracy and ease Third World poverty.
