Premier Wen Jiabao has warned that China's economy could face difficult times in the first quarter, but said the government was ready to 'fine-tune' monetary policy.
Wen (pictured) said people should be confident the nation would surmount economic hurdles and usher in stable growth.
'We have a relatively cool market, which is the core of today's problems,' he told local businessmen during a tour of Hunan province on Sunday and Monday.
The premier said China had to deal with the twin pressures of an economic downturn and high prices, Xinhua reported. Dwindling external demand and rising costs for enterprises made the situation more complicated than after the 2008 global financial crisis, Wen said.
While the focus of boosting domestic demand would be stimulating consumption, it also required attracting investment, Wen said. Still, he reiterated that the government's policy was to rein in industries that were heavily polluting, used a lot of energy or suffered from overcapacity, and to curb wasteful construction.
Growth in the world's second-largest economy slowed to 9.1 per cent in the third quarter last year, down from 9.5 per cent in the second quarter and 9.7 per cent in the first.
The official Purchasing Managers' Index (PMI) - a preliminary barometer of manufacturing activity - dropped below 50 in November for the first time since February 2009. It rebounded to 50.3 in December. A figure above 50 indicates output is expanding.
