China Premier Wen: To Make Growth A Bigger Priority -Xinhua - Wall Street Journal

BEIJING (Dow Jones)--Chinese Premier Wen Jiabao has vowed to make growth a bigger priority, marking a decisive shift in rhetoric toward stimulating growth, as the Chinese economy has shown signs of weakness.

China will put more emphasis on ensuring steady growth while maintaining a proactive fiscal policy and a prudent monetary policy, the official Xinhua News Agency on Sunday quoted Wen as saying.

Wen made the remarks during a visit to the country's Hubei Province from Friday to Sunday, Xinhua said.

The comments are an indication that recent weakness in the economy has caused serious concern among its top leaders, and strongly suggest that more stimulus measures will be forthcoming.

During the National People's Congress in March, Wen defended the nation's slightly reduced annual growth target of 7.5% for this year, down from 8% the last several years, saying slower growth would help China restructure and reform its economy.

But concerns over China's slowing growth have intensified after a raft of weak economic data for April. Growth in industrial production, imports, exports, fixed-asset investment and bank lending all slowed in April.

Wen said over the weekend that the authorities will carry out timely fine-tuning measures in response to new problems that have emerged in the economy.

In notably less hawkish comments about the real estate market, Wen said the government will stabilize property market regulation policies, and strictly implement differentiated measures in credit supply, tax policies and purchase limits for the property market.

In previous comments, Wen has typically vowed to resolutely maintain curbs on apartment purchases which have triggered a correction in property prices. That language was largely absent from his remarks over the weekend, which is likely to prompt speculation that Beijing is softening its stance.

He also said the government will speed up expanding a pilot tax reform begun in Shanghai. Under the program, certain industries in Shanghai had their business tax replaced with a lower value-added tax starting this year.

Wen's comments follow a series of stimulus measures unveiled in recent weeks to bolster the economy.

China's railways minister said Friday that the government is studying a series of initiatives to broaden financing channels for its railways sector and to encourage private capital to invest in the industry. On Wednesday, Beijing announced new subsidies for purchases of energy-efficient appliances, and last weekend, the central bank lowered banks' reserve requirement ratio, freeing up additional cash for lending.

-Liyan Qi contributed to this article, Dow Jones Newswires; (86 10) 8400-7718; liyan.qi@dowjones.com