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China prepared to roll out extra spending

China will increase public spending further this year to boost its economy if needed and already has contingency plans in place to do so, Premier Wen Jiabao said on Friday at his annual press conference.

Speaking at the closing of the National People’s Congress in Beijing, Mr Wen said he was “worried” about the value of China’s large holdings of US assets and warned the US to take measures to guarantee its “good credit”.

Mr Wen also said that China would maintain the “basic stability” of its currency but cautioned that pressure from other countries would not force it to change its exchange rate policy.

China has pledged to achieve a 8 per cent growth rate this year, which Mr Wen said was difficult but possible, and the government has said it will run a 3 per cent budget deficit this year in order to finance stimulus measures.

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This article was originally posted on FT.com

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