Thursday, March 04, 2010


"Latent risk". Well, that is one way to describe it I suppose.

March 5 (Bloomberg) -- Premier Wen Jiabao warned of “latent risk” in China’s banks and pledged to crack down on property speculation as the government faces the consequences of flooding the economy with money to drive growth.

“The domestic economy still faces some prominent problems,” Wen, 67, said in a speech in Beijing to the National People’s Congress, similar to the U.S. State of the Union address. He also cited excess capacity in manufacturing and weak support for rural-income growth.

The government pledged today to raise health and social security outlays by more than 8 percent in 2010 and expand pensions, efforts that may help rebalance the economy toward consumer spending and away from investment and exports. Wen indicated no roll-back in the fiscal stimulus that spurred a rebound, targeting a budget deficit of 1.05 trillion yuan ($153 billion), or 2.8 percent of gross domestic product, about the same ratio as last year’s shortfall.

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