17 Aug 2012

China economy under pressure

1:02 pm on 17 August 2012

Premier Wen Jiabao of China has warned that the country's economy is under pressure and that it is facing problems that may last for some time. However, he said that Beijing will be able to meet its growth target.

He said that easing inflation had given more room to policymakers to introduce measures to spur growth.

China has been hurt by slowing global demand for its exports and lacklustre growth in domestic consumption.

"We have the conditions and capabilities, and will be sure to fulfil this year's economic and social development targets," Premier Wen was quoted as saying by the Xinhua news agency.

The comments comes amid worries of a sharp slowdown in the economy, the world's second-largest.

Gross domestic product grew at an annual rate of 7.6% during the April-to-June period - but it was the slowest pace of expansion in three years.

The BBC reports data issued earlier this month showed a sharp decline in export and import growth during July, indicating that both external and internal demand were slowing.

The People's Bank of China has already cut its key interest rates twice since the start of June.

It has also cut the reserve ratio requirement, the amount of money the country's banks must keep in reserve, three times in past few months, in a bid to boost lending.