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China faces many global and domestic difficulties

China faces many global and domestic difficulties

Updated: 2012-03-05 10:24

(Xinhua)

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BEIJING - China still faces many difficulties and challenges internationally and domestically in economic and social development, according to a government work report delivered by Premier Wen Jiabao at the annual parliamentary session Monday morning.

"We are keenly aware of that," Wen said, describing the global economic recovery as "tortuous". He said the global financial crisis is still evolving, and the sovereign debt crisis in some countries will not ease any time soon.

Wen noted that major developed economies lack impetus for growth and their unemployment rate remains high, while emerging economies face the dual pressures of inflation and slowing economic growth.

He warned of sharp fluctuations in the exchange rates of major currencies and the prices of important commodities, as well as mounting protectionism in international trade and investment.

Domestically, he said, it has become more urgent and more difficult to solve institutional and structural problems and alleviate the problem of unbalanced, uncoordinated, and unsustainable development.

"China's economy is encountering new problems," Wen said, citing downward pressure on economic growth as well as high prices in the world's second-largest economy.

Wen vowed to coordinate efforts to achieve steady growth, control prices, adjust the economic structure, improve the people's well-being, implement reform, and promote harmony.

"China's macro economy faces a lot of uncertainties this year, particularly from overseas markets," said Zhuang Jian, an economist with the Asian Development Bank. "External demand looks weak and its strength to drive the Chinese economy will be quite weak, too."

Zhuang said the macro control over the real estate market will remain one challenge China has to properly handle in 2012.

"There are quite a lot of debates over property tightening policy in the society right now," he said, adding the property market has a significant impact on China's economy.

Further, he said the government must help small and micro enterprises survive the difficult business environment amid shrinking overseas orders and rising costs.

"All the difficulties and challenges will create pressure of restructuring for China's economy," Zhuang added.

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