I’m with the Interfax of Russia. I have worked in China for 18 years. I like this country very much and hope to continue to live here. Well, recently we have seen much change in the consumer prices in China. I would like to ask: what is the cause for inflation? Many Russian media organizations have spoken highly of the measures taken by the central government in countering the international financial crisis. They say that it is because of these measures that China has been one of the least affected countries during the financial crisis. Do you agree with this view?
As a matter of fact, the international financial crisis has exerted a huge impact on China. It has exerted a big impact on the real economy. We may recall that between the end of 2008 and the first half of 2009, global trade tumbled by 26% and Chinese exports also fell substantially. The Baltic Dry Index (BDI) once dropped to 0.When I paid an inspection trip to a container port in Shenzhen, the local manager told me that not a single order was received. At the certain point, the Chinese GDP fell to as low as 3.8% in its growth, a large number of businesses had to close and a large number of rural migrant workers had to go back to their home villages. It is under such tough circumstances that we adopted a stimulus package that has four key components. They include: we massively increased government investment and conducted structural tax cuts so as to return the businesses to growth. Second, we improved the social security system in order to stabilize and improve the people’s livelihood. Third, we vigorously promoted science and technology advances to sustain the momentum of China’s economic development. And fourth, we carried out massive structural adjustments in Chinese businesses and in particular encouraged the growth of strategic emerging industries. All these stimulus measures are designed to not only address immediate problems but also ensure China’s long term development. The government introduced a 4 trillion RMB yuan investment plan, and as to the proportion of the expenditure under this plan on the part of the government, I have already given a detailed explanation in my government work report. I think the very crux of your question is about the impact of the financial crisis on the Chinese economy whether the impact is a small one. Well, I would like to say that a person who has not experienced the difficulty will not be able to fully appreciate the gravity of the difficulty itself. It is with very hard efforts that we managed to make the Chinese economy one of the first in the world to achieve a recovery and rebound and avoid serious setbacks in China’s economic development. I think these achievements of China on this front have been widely recognized. With respect to the inflation issue that you raised, as I said before, inflation now is a global issue. Some emerging economies experienced 8% or even 10% of CPI rise. And I have already explained our views on what are the causes for such inflation. I would like to in particular stress that in managing inflation expectation and fighting inflation, we will appropriately manage the currency environment and in particular to mop up excess liquidity, because that way we will be able to root out the fundamental cause for inflation. Thank you!