China central bank says recovery still weak

The Jakarta Post, The Associated Press, Beijing | Wed, 12/23/2009 6:39 PM

China's central bank warned Wednesday that the country's economic recovery is still weak despite improving conditions and said changes in its development model are urgently needed.

In a quarterly report, the People's Bank of China also said it is studying ways to improve oversight of China's financial industry and guard against excessive risk.

"Our national economic situation is getting better, but the internal force of the economic recovery is inadequate," the report said. "Structural contradictions still exist, so changes in the path of economic development are even more urgent."

The communist government is trying to reduce reliance on exports and investment by boosting domestic consumption, a key element of its 4 trillion yuan ($586 billion) stimulus. Economists say such a change is essential if China is to continue growing, and the plunge in global demand has made it more necessary.

Driven by the stimulus, China's growth rose to 8.9 percent from a year earlier in the third quarter after dipping to 6.1 percent in the first quarter as exports fell.

But Chinese leaders say the recovery is not solidly established and have warned against complacency.