Hard to See Quick Rebound in China Economy

China's economy will not experience a rapid recovery because it will take time to find a new growth engine to replace sagging exports, an influential economist said in remarks published on Monday.

Eugene Hoshiko / AP

Li Yang, a former adviser to the People's Bank of China, the central bank, said he expected the world economy would need at least five years to fully get over the current recession.

"China should not count on a turnaround of external demand to bring about its recovery," Li, director of the finance institute at the Chinese Academy of Social Sciences, was quoted by the Shanghai Securities News as saying.

Li said he expected China's recovery to be W-shaped -- meaning that growth would falter once current fiscal and monetary stimulus wears off before regaining momentum.

Premier Wen Jiabao also struck a note of caution over the weekend, restating his government's view that the foundations for economic recovery were not solid.

Speaking in Hunan province, Wen said Beijing would stick to its relaxed monetary stance and fully implement its 4 trillion yuan ($585 billion) fiscal stimulus.

Wen said the government would beef up the stimulus package if needed, the official Xinhua News Agency reported.

In a separate speech, Fan Gang, a member of the PBOC's monetary policy committee, said policymakers could prime the economy without fretting about a resurgence of inflation.

State radio quoted Fan as noting that consumer and producer prices had been falling from year-earlier levels for several months.

"There's no need to worry about inflation now. The inflation threat is still far away," he said.

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