Wen Jiabao, the 69-year old Chinese premier tried to quell concerns over China’s spiralling inflation and social stability ahead of a five-day European tour.
In an opinion piece published in Friday’s edition of the Financial Times newspaper, Wen wrote he was “confident price rises will be firmly under control this year,” and that China is “fully capable of sustaining steady and fast economic growth.”
China’s inflation ran at a 34-month high of 5.5 percent in May and is expected to hit 6 percent in June or July. With China’s central bank raising interest rates four times since October last, the inflation figures are well above China’s 2011 inflation target of 4 percent.
The rising cost of food which surged by 11.7 percent and commodities have pushed up the cost of living, giving way to fears that the high prices may derail domestic growth and could spark civil unrest.
The Chinese Premiere had good reason to sound buoyant about his country’s economy before his visit as the 27-member EU bloc is now China’s largest trading partner with bilateral trade worth nearly 400 bln euros ($573 bln).
“There is concern as to whether China can rein in inflation and sustain its rapid development,” Wen wrote. “My answer is an emphatic yes.”
Speaking to the Chicago Tribune, Ting Lu, an economist at Merrill Lynch-Bank of America, argued Wen might have deliberately sounded so positive as he knew he was addressing foreign readers of the Financial Times.
“Readers should read the article with some grain of salt,” he was quoted as saying.
Seen by many as a gesture to spare Wen Jiabao embarrassment during his trip to Europe, China last week released world famous Chinese dissident artist Ai Weiwei on bail but China watchers have said that China needs to do more to protect its citizens from human rights abuse.
British Foreign Secretary William Hague while welcoming Ai’s release said last week voiced similar concerns.
“I am also concerned by the cases of other activists, lawyers, journalists and bloggers detained in recent weeks, and call on the Chinese authorities to ensure they are treated in accordance with international human rights standards”, AFP quoted Hague yesterday.