Wen told the country’s parliament that China’s economy faced a clouded international outlook in 2010 and would stick to a steady policy course this year, shifting tack if needed to counter the lingering impact of the global credit crunch. China would maintain an appropriately easy monetary stance and an active fiscal policy, he added, showing no sign of a break from current settings. “We must not interpret the economic turnaround as a fundamental improvement in the economic situation,” Wen said in his annual “State of the Union”-style report to the National People’s Congress. Despite the lack of change in any of the key wording, analysts noted that Wen’s increased emphasis on controlling inflation showed the government was trying to mop up excess cash in the economy after last year’s extraordinary credit boom. He also signalled continued caution towards the yuan, reiterating standard language that Beijing would seek to keep the currency steady as it has done since the financial crisis struck in mid-2008, to the chagrin of its trade partners.
Speaking to the nearly 3,000 legislative delegates gathered in the cavernous Great Hall of the People, Wen unveiled increases in spending for China’s poorer citizens and 700-million strong farming population that outstripped the planned rise in military outlays.
