Wen: China Considering New Stimulus Package

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Feb. 2 – Chinese Premier Wen Jiabao said that Beijing was considering another economic stimulus plan in addition to the initial US$585 billion package announced last November.

Wen spoke during an interview with the Financial Times during the fifth leg of a European tour tasked to assure trade partners that China will cooperate with the west to contain the effects of the global economic crisis.

“We may take further new, timely and decisive measures. All these measures have to be taken preemptively before an economic retreat,” he said.

Wen added that Beijing wants its currency at a balanced and reasonable level.  “Many people have not come to see this point. . . If we have a drastic fluctuation in the exchange rate of the renminbi, it would be a big disaster,” he said.

China has been quick to implement measures to help its economy deal with the slowdown and stimulate domestic spending. The government has implemented rounds of tax cuts, infrastructure spending and subsidies for consumers with the goal of reaching an 8 percent growth rate for 2009. Last year’s figures showed that the Chinese economy slowed down to 6.8 percent during the fourth quarter.

During the interview, Wen also confirmed that U.S. president, Barack Obama, had spoken to President Hu Jintao following the comments by U.S. Treasury secretary, Tim Geithner, that China was “manipulating” the value of its currency against the U.S. dollar.