Recession risk 'worse than expected': NDRC

By Fu Jing (China Daily)
Updated: 2008-12-13 09:00

China is facing "worse-than-expected" risks of an economic downturn, as the global recession looms large, the country's top economic planner said on Friday.

Zhang Ping, minister of the National Development and Reform Commission, said it is "still very hard" to predict when the worsening global financial crisis will hit.

Local vendors pile up carrots while waiting for customers at a vegetable wholesale market in Zheng'an County, Henan province December 11, 2008. [Agencies]

This is the first time a senior Chinese official has outlined the domestic and global economic landscape while the financial crisis, sparked by the US sub-prime crisis, is still unfolding.

"Amid the domestic and global risks and uncertainties, coping with sliding economic growth is top of the government's work agenda," Zhang said.

He made the comments during a speech to senior provincial officials in charge of economic and social development at the opening of a three-day national conference to implement the central government's instructions and guidelines on fighting the financial crisis.

On Wednesday, the government ended a closed-door economic conference by coming up with guidelines to fight the crisis.

As more than 60 percent of China's economy depends on imports and exports, the worsening global economy and contracted overseas demand have already brought "worse-than-anticipated" risks of an economic downturn to China, Zhang said.

"Sliding economic growth is a major challenge for us both this year and next."

China's economic growth slowed to 9.9 percent in the first nine months, after five years of high annual growth of more than 10 percent.

The State Council said earlier that the economy may grow at 9.4 or 9.5 percent this year.

The economic slowdown and fall in profits have spread from coastal regions to central and western China, from export-led companies to other industries and from small and medium-sized enterprises to bigger companies, Zhang said.

"The worsening trend is likely to continue next year," he said.

He urged all parties to be clear-minded about the situation at home and abroad, and be prepared to face the challenges.

Despite some pundits saying the world will shake off the turmoil by the end of next year, Zhang is not so optimistic.

"The worsening turmoil is likely to last for a long time and the global economy will experience a relatively long period of downturn and adjustment," he said.