China on course to meet growth target

China is on course to meet its 2012 growth target despite recently slowing, Premier Wen Jiabao said yesterday, as he defended his 10 years at the helm of the world's second economy. China's economy "was showing signs of stabilizing" and would likely meet the 7.5 percent growth target the government set for the year, Wen said in a speech to the World Economic Forum in the eastern city of Tianjin. "We are fully confident that we have the conditions and capability to overcome difficulties on the way ahead, maintain fast and stable economic growth and realize development at a higher level and with better quality," he said. "The economic growth is still within the target range set at the beginning of the year and is showing stabilizing signs despite the slowdown." China has already cut interest rates twice this year to boost flagging growth and trimmed the amount of funds banks must place in reserve three times since last December, but Wen said there was room for more cuts. "We will, according to economic trends, make full use of the advantage of having relatively big space for fiscal and monetary policy (moves), bring the potential for domestic demand into maximum play and place the stabilization of growth on an even more prominent position," he said. In an effort to face the ongoing global economic downturn, China would strengthen economic fine tuning, implement structural tax cuts and encourage effective investment, Wen said without giving specific details. He vigorously defended his massive 4.0 trillion yuan fiscal stimulus package in 2008, but shied away from announcing any new coordinated government stimulus measures. Last week, state press said that a massive infrastructure package worth more than 1.0 trillion yuan ($158 billion) had been approved, but the government has not made any formal announcement on it. Wen further urged the major economies and international institutions to work together to boost global growth. "The international community must further strengthen the coordination of our macro-policies, push forward reform of the global governance system, firmly oppose trade and investment protectionism, and jointly promote the global economy to recover steadily," he said. "I firmly believe the future of the Chinese economy is bright and so is the world economy." Meanwhile, outbound Chinese investment rose to a new high in the April-June quarter, a gauge by a private equity fund showed yesterday, as the economy weakens and companies seek opportunities abroad. The A Capital Dragon Index hit 2,125 points in the second quarter of this year as overseas investments jumped 67 percent from the same period the year before, A Capital said in a release. The second-quarter increase surpassed the previous high of 2,069 points hit at the end of 2010, A Capital said. It identified Europe as a key destination for Chinese companies, with investments there doubling in the second quarter from the year before. It said the second quarter was boosted by China's Sany Heavy Industry's takeover of German family-owned engineering firm Putzmeister. "Europe remains the leading destination quarter after quarter, confirming the strong complementarity and quality of European firms for Chinese investors," A Capital said. China's overseas direct investment slowed sharply last year owing to a weak global economic recovery and financial turmoil in Europe and the United States. Arabnews