China prudent on fiscal strategy

China has vowed to take a prudent approach in gradually withdrawing its proactive fiscal policy. Vice Finance Minister, Wang Jun, made the remarks at the China Development Forum in Beijing, but stopped short of unveiling a timetable for the strategy's withdrawal.

Vice Finance Minister, Wang Jun, eased these worries by vowing to implement a step- by-step withdrawal to ensure a stable transition.

China announced a 4-trillion-yuan stimulus package in late 2008 and rolled it out in 2009 and this year. With China's GDP growth reaching 8.7 percent and new yuan loans amounting to 9.6 trillion yuan last year, investors were concerned the government may halt stimulus measures to avoid rising inflation and asset bubbles.

Vice Finance Minister, Wang Jun, eased these worries by vowing to implement a step-by-step withdrawal to ensure a stable transition.

Wang Jun, Vice Finance Minister, said, "It is much tougher to withdraw stimulus measures than to adopt them. The policies cannot be withdrawn haphazardly. The process should be gradual and modest. I don't think it's time yet to reign in incentive policies. Nevertheless, exit strategies should still be discussed."

Wang Jun also warned global economic growth remains uncertain and its recovery so far has not been solid. He stressed the importance of considering the global economic environment, instead of solely focusing on China's conditions.

Wang said, "We need coordination. Although it's hard to achieve this on a global scale, we should still strive for it. But the final decision should still be made based on a nation's own economic situation."

The vice minister was optimistic China is on track to achieve stable exit and make a soft economic landing to return to reasonable growth.