China's Wen warns economy under pressure

Chinese Premier Wen Jiabao said Sunday that the country's economy faces downward pressure as he called for more aggressive moves to keep growth on track, state media reported. China cut interest rates from Friday, following a similar move early last month, as the government seeks to avert a hard landing for the world's second-largest economy. "Currently, China's economy is generally stable, but downward pressure is still relatively big," the official Xinhua news agency quoted Wen as telling a government meeting in the eastern city of Nanjing. "We must take further steps to increase the strength of pre-emptive fine-tuning," he said, referring to economic policy. China has also ramped up government spending and cut the amount of cash banks must keep in reserve three times since December. Wen said economic growth remained within the government's target, but urged an active fiscal policy to help the economy. The government early this year set an annual economic growth target of 7.5 percent, down from expansion of 9.2 percent last year and 10.4 percent in 2010. China's economy grew an annual 8.1 percent in the first quarter of 2012 -- its slowest pace in nearly three years. The government will release the gross domestic product figure for the second quarter on Friday. Speaking during a three-day trip to the eastern province of Jiangsu, Wen also called for efforts to limit property speculation, Xinhua said in a separate report late Saturday. China has implemented several measures aimed at curbing runaway property prices for more than a year, including bans on buying second homes, hiking minimum down-payments and introducing property taxes in certain cities. But lower mortgage rates and local governments testing the limits of the policy have caused property sales to pick up in some cities, analysts say. "We must continue to firmly control speculative investment," Wen said. "We must make controlling property speculation a long-term policy... prices cannot be allowed to rebound." The government has been seeking to clamp down on speculative demand while at the same time encouraging banks to lend to first-time home buyers. In May, the number of cities that recorded rises in home prices doubled to six, suggesting prices have started to rebound despite government controls. Out of 70 cities tracked by the government, 43 registered month-on-month falls in home prices in May, while 21 were flat, official figures showed.