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Chinese Premier Wen Jiabao urges government to move forward on economic reform

Wen Jiabao

Wen Jiabao

On Monday, Chinese Premier Wen Jiabao, who is second in power only to the president, urged the government to push financial reform to promote economic growth.

During a visit to the People’s Bank of China, Wen advised the central bank to move forward on reforms to interest rates and the yuan exchange system, Xinhua News reports.

“Financial work is still facing a severe and complicated domestic and overseas environment,” Wen said, according to The Economic Times. “We must make full use of monetary policy for the economy to realize continued healthy development.”

The Chinese economy, the second largest in the world, grew at 7.8 percent last year, its slowest pace in 13 years, as the country faced economic domestic and foreign economic woes.

China’s central bank reduced interest rates in July and opted to use open market operations to increase liquidity to support a struggling economy, The Economic Times reports.

Wen said that, in order to make the yuan convertible under the capital account, the government should expand the yuan exchange in cross-border investments and trade, according to Xinhua News.

The government, in its effort to make the yuan freely convertible, began allowing its yuan to trade more against the U.S. dollar last year, a move that has also received support from Wen, The Economic Times reports.

Wen will step down from his position as premier in March, the end of a decade-long career in economic policy and government. Li Keqiang, a member of the Communist Party’s Politburo Standing Committee, is set to replace him.

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