China's economic leaders struck a note of quiet confidence that the economy is already reviving in response to swift action to counter the shock of the global financial crisis.
Premier Wen Jiabao disappointed financial markets on Thursday by failing to announce an increase in a 4 trillion yuan ($585 billion) investment plan rushed out on Nov. 9 as crumbling exports drained life from the world's third-largest economy.
But comments on Friday by a trio of top officials suggested that, while Beijing stands ready to prime the pump further, extra measures might prove unnecessary because substantial fiscal and monetary stimulus is already coursing through the economy.
"The economic figures are stabilising and recovering, which demonstrates that the policies have begun to show an impact," central bank governor Zhou Xiaochuan said.
Speaking at a news conference during the National People's Congress, the largely ceremonial parliament, Zhou said China had learned the lesson from other countries that a sluggish response to the crisis delays the restoration of confidence.
"We must err on the side of being quick and decisive."
Zhou was speaking a day after Wen said China would ramp up deficit spending this year to hit its target of 8 percent growth, widely thought to be the minimum needed to keep a lid on unemployment and head off the threat of social unrest.
NO COMPLACENCY
Recent figures have suggested the economy may be on the cusp of a recovery.
New domestic-currency lending has surged since November and hit a record 1.6 trillion yuan in January, while surveys show manufacturing is picking up from very depressed levels.
On the other hand, a tentative recovery in steel prices has faltered, and recessions in China's key export markets appear to be worsening.
Zhang Ping, head of the National Development and Reform Commission, the main planning agency, said Beijing would keep tracking the flow of economic data before deciding whether extra stimulus was necessary.
"Of course, we can't complacently assume that we can entirely avoid the impact of the crisis or that our measures are already enough to counter it," he said.
"But I believe that, with the measures that we've taken or will take, we can have full confidence that we can escape the current hardships and fully respond to this crisis, because in the long term our economic conditions have not fundamentally changed," Zhang added.
The officials made it clear that China still had plenty of ammunition to fire if necessary.
China's national budget deficit will jump more than sevenfold this year to over 1 trillion yuan. But that will still be less than 3 percent of national income. The United States, by comparison, is budgeting for a deficit of 12.3 percent of GDP.
"This is something that our country can handle and remains at a safe level," Xie Xuren, the finance minister, said of the projected deficit.
Likewise, Zhou said the central bank still had plenty of scope to "fine-tune" monetary policy following five cuts in interest rates and four reductions in banks' required reserves since September.
Speculation has swirled that China, in addition to pumping up the deficit and lowering borrowing costs, might also let the yuan fall in order to help its beleaguered exporters.
The 21st Century Business Herald quoted an unidentified official as saying China's exports and imports both slumped by more than 20 percent in February from year-earlier levels, following drops of 17.5 percent and 43.1 percent respectively in January.
Asked whether he could rule out depreciation of the yuan, Zhou kept his options open by saying that China had drawn up various contingency plans for the currency and the economy in the event of a further deterioration in international conditions.
But he said Wen had made China's position clear on Thursday by stating the yuan would remain "basically stable at a reasonable and balanced level".
