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'China Promises Growth, World Markets Rise'

China has drawn the attention of depressed analysts and investors looking for a safe place to put money. A propaganda speech on Thursday by the Chinese premier -- to a roomful of Communist Party faithful -- had world markets excited for almost two full days. German papers examine why.

Chinese Premier Wen Jiabao gave a sunny speech on Thursday to his National People's Congress, Beijing's rubber-stamp legislature, and offered economic predictions that sounded as enviable as they were unlikely. In a recession season, with most nations wondering when their economies will quit collapsing, Wen promised to "significantly increase government spending" to ensure 8 percent growth for China in 2009.

It's true that scared Western investors are searching for bargains, and China -- with no banking crisis, no recession, and an ever-expanding private sector -- looks promising. Even before Wen's speech world markets rose on a few bright statistics showing that a $585 billion (€460 billion) stimulus package had started to boost the Chinese economy. There was hope that Wen might announce a second big stimulus package on Thursday -- which he declined to do, saying China was healthy enough.

Independent observers said 8 percent growth would be hard for China to achieve this year with the United States and Europe buying fewer exports. Most private-sector economists are forecasting growth as low as 5.6 percent. Despite continued growth, orders for exports are drying up and countless migrant workers have lost their jobs. "We face unprecedented difficulties and challenges," Wen told delegates, and analysts point to potential unrest from unemployed workers as a potential threat to the Communist Party's grip on power.

Still, in anticipation of massive government spending by China, market indexes rose in Asia, Europe and the US on Wednesday and even Thursday morning before falling after investors realized there would be no new stimulus package. The credulous reaction by Western markets has piqued the tempers of editorial writers in German papers on Friday morning.

The center-left Süddeutsche Zeitung writes:

"China promises growth, and markets rise around the world. In this dark night of sorry news, it seems, any glimmer of light is welcome, even if it's thrown by a guttering candle … Eight percent growth! Forward, forward comrades, even if the speculators in America have promised difficult times for us! Put your trust in the Party, and overcome the crisis! Deafening applause."

"The world must be in truly bad shape if Beijing's political theater is enough to lift the markets. All the analysts in banks and markets who have looked to China now want to hear nothing but good news … But China's Communists have always delivered good news in the People's Hall, whenever party members have come together behind their cups of tea."

The conservative daily Die Welt writes:

"China's leadership wants to show that it recognizes the size of the crisis, and it has tried to respond in a measured way. First, the government presents its budget. A Chinese premier has never been so detailed about the social needs of his people, or so clear about the measures demanded by an ever-more-self-assured public to fight corruption and malfeasance. Beijing wants to deal head-on with a growing wave of social dissatisfaction."

"In the end, though, the premier's vision can't be achieved without a plan of action. Eight percent growth in 2009 is utopian. But to give a more positive spin to the whole event, Wen announced serious peace talks with the 'breakaway' government of Taiwan. It was real accountability for Wen Jiabao, a self-justification, almost an apology."

The Financial Times Deutschland writes:

"It's natural for the world to yearn for leadership in a time when the bad economic news is unrelenting and whole nations lie on the verge of bankruptcy. And since the United States has not made it obvious that it has a real recipe for success in this crisis, the world has turned its attention to China."

"But China is not a model state -- not in the slightest. When Premier Wen Jiabao gives a goal of eight percent growth in his speech before the People's Congress, it's not a challenge so much as a transparent propaganda trick. The government is doing everything to quell the masses, since workers in China have already suffered from the slump in world trade."

"(Nevertheless) the Chinese autocracy is in the process of change. Within the Communist Party, and above all at a local level, there are experiments with pluralism. In some ways the rudiments of an open society are recognizable. We can hope these developments will go forward. But it isn't a sure thing."

-- SPIEGEL ONLINE Staff