China is on course to meet its 2012 growth target despite recently slowing, Premier Wen Jiabao said today, as he defended his 10 years at the helm of the world’s second economy.

China’s economy “was showing signs of stabilising” and would likely meet the 7.5 per cent growth target the government set for the year, Wen said in a speech to the World Economic Forum in the eastern city of Tianjin.

“We are fully confident that we have the conditions and capability to overcome difficulties on the way ahead, maintain fast and stable economic growth and realise development at a higher level and with better quality,” he said.

“The economic growth is still within the target range set at the beginning of the year and is showing stabilising signs despite the slowdown.”

China has already cut interest rates twice this year to boost the flagging growth and trimmed the amount of funds banks must place in reserve three times since last December, but Wen said there was room for more cuts.

“We will, according to economic trends, make full use of the advantage of having relatively big space for fiscal and monetary policy (moves), bring the potential for domestic demand into maximum play and place the stabilisation of growth on an even more prominent position,” he said.

In an effort to face the ongoing global economic downturn, China would strengthen economic fine-tuning, implement structural tax cuts and encourage effective investment, Wen said without giving specific details.

Stimulus measures

He vigorously defended his massive 4.0 trillion yuan fiscal stimulus package in 2008, but shied away from announcing any new coordinated government stimulus measures.

Last week, state press said that a massive infrastructure package worth more than 1.0 trillion yuan ($158 billion) had been approved, but the government has not made any formal announcement on it.

Wen further urged the major economies and international institutions to work together to boost global growth.

“The international community must further strengthen the coordination of our macro-policies, push forward reform of the global governance system, firmly oppose trade and investment protectionism, and jointly promote the global economy to recover steadily,” he said.

“I firmly believe the future of the Chinese economy is bright and so is the world economy.”

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