Although Wen admitted the world's third biggest economy was struggling, and he did not unveil any new stimulus measures as expected, his growth forecast was well received on Asian markets, with Tokyo closing up 1.95 percent and Shanghai up 1.80 percent at midday.

Hong Kong's Hang Seng Index edged down 0.4 percent in morning trade on profit taking after Wall Street rallied Wednesday to close 2.23 percent higher.

Wen, speaking to lawmakers at the start of the annual parliamentary session, said China's export-driven economy would survive the crisis.

"We are fully confident that we will overcome difficulties and challenges, and we have the conditions and ability to do so," Wen said.

The premier said maintaining growth of about 8.0 percent was "essential for expanding employment for both urban and rural residents, increasing people's incomes and ensuring social stability."

Officials here are concerned that social unrest could spread in China's vast countryside, where 20 million rural migrants have lost their jobs in recent months as thousands of factories have been forced to shut their doors.

"As long as we adopt the right policies and appropriate measures, and implement them effectively, we will be able to achieve this target," Wen said.

Many of Asia's export-dependent economies have been hit especially hard by the worldwide financial meltdown, as consumer demand in the United States and Europe has evaporated.

Japan's Prime Minister Taro Aso said Thursday there was "no bottom in sight" for Asia's largest economy, which is deteriorating rapidly amid the global downturn.

The country has has seen exports plunge by more than 45 percent and industrial output slashed by a record 10 percent in January, on Thursday released data showing companies are massively cutting investment to cope.

Investment in plants and equipment dropped by 17.3 percent in the three months to December from a year earlier, led by the country's struggling automakers and other manufacturers, the finance ministry said.

"The result confirmed that the Japanese economy is worsening rapidly and going though a very tough phase," a ministry official told reporters.

In South Korea -- where exports, which account for more than one-third of GDP, are down 34 percent -- the government promised bold steps to revive domestic demand and save jobs in an "all-out" bid to save the economy.

Finance Minister Yoon Jeung-Hyun, describing the global downturn as "unprecedentedly far-reaching and fast worsening," said Seoul would focus on developing its service industry to power growth.

The government would "make all-out efforts to preserve and create jobs" by expanding tax incentives to companies and first-time homebuyers, and granting businesses rollovers on outstanding loans, Yoon said.

South Korea's economy, Asia's fourth-largest, is on the edge of recession. It shrank 5.6 percent quarter-on-quarter in October-December, its worst showing since the Asian crisis of 1998.

Malaysia, also trying to stave off recession, put forth in parliament plans for a 10-billion-ringgit (2.69-billion-dollar) spending plan to boost the economy.

Bleak data from the US did little to bolster sentiment in Asia, with the Federal Reserve saying economic activity "deteriorated further" in February, citing weak consumer spending, tight credit and decreased factory output.

"Looking ahead, contacts from various districts rate the prospects for near-term improvement in economic conditions as poor, with a significant pickup not expected before late 2009 or early 2010," it said in its Beige Book report.

The US economy shrank by a more-than-expected 6.2 percent in the fourth quarter, and some analysts say that figure could be even worse in the first quarter of this year.

The administration of US President Barack Obama on Wednesday unveiled a 75-billion-dollar plan to help millions of homeowners keep their houses, either through loan modifications or mortgage refinancing.

"It is imperative that we continue to move with speed to help make housing more affordable and help arrest the damaging spiral in our housing markets," Treasury Secretary Timothy Geithner said in a statement.

But the release of that plan came as a private sector survey showed 697,000 job losses in February, stoking fears of a particularly grim US jobs data report on Friday.

earlier related report
Wen says China will still grow about 8 pct despite crisis
Premier Wen Jiabao said Thursday that China was facing unprecedented challenges from the global crisis but he was confident the country would still achieve growth of about eight percent this year.

In his annual "state of the nation" address to open parliament, Wen gave the most detailed blueprint yet of a four-trillion-yuan (585-billion-dollar) stimulus plan aimed at steering China through the downturn.

The premier acknowledged the Chinese economy, the third-biggest in the world, was hurting and the climate was not expected to get better soon in the face of a global recession that has weakened demand for Chinese goods.

"We face unprecedented difficulties and challenges. The global financial crisis continues to spread and get worse," Wen told the 3,000 delegates gathered for the Communist Party's showpiece political event of the year.

"Demand continues to shrink on international markets. The trend for global deflation is obvious and trade protectionism is resurgent," he told the lawmakers, who will be gathered for nine days.

But Wen said China's economy was still expected to grow by about 8.0 percent this year -- a rate officials have stressed is needed to prevent social unrest triggered by widescale unemployment.

"We are fully confident that we will overcome difficulties and challenges, and we have the conditions and ability to do so," Wen said.

China's economic growth dipped to 6.8 percent in the final quarter of last year, worrying figures for a government long used to double-digit expansions and marking a dramatic slowdown from 13.0 percent growth in all of 2007.

The slowdown in China's economy, which is reliant on exports to developed economies that are now in recession, has made 20 million rural migrant workers jobless in recent months amid countless factory closures.

China typically sees tens of thousands of protests each year even in economic boom times, and rising unemployment has fuelled fears among the communist leadership of social unrest.

Wen also acknowledged problems that could fuel tensions and had been exacerbated by the crisis, such as an inadequate social safety net and health care system, as well as a wealth gap.

But he said the 8.0-percent target was achievable and would provide a sound platform for creating millions of jobs and soothing social tensions.

"Maintaining a certain growth rate for the economy is essential for expanding employment for both urban and rural residents, increasing people's incomes and ensuring social stability," he said.

Wen's assessment was more optimistic than that of the International Monetary Fund, which has forecast economic growth for China this year of 6.7 percent.

Highlighting unrest concerns, security was tight around the Great Hall of the People, where parliament was sitting, and dissidents told AFP that authorities had placed new restrictions on their movements.

"There are police stationed outside 24 hours and I can't go anywhere unless I travel in a police car," dissident Gao Hongming told AFP by phone from his Beijing home.

Adding to the sense of unease are tensions surrounding China's 58-year rule of Tibet as a sensitive 50th anniversary of a failed uprising falls on March 10.

Wen gave details of the wide-ranging plan for the four-trillion-yuan stimulus package, which is to be spent over two years and contribute to a record budget deficit of 950 billion yuan (140 billion dollars) in 2009.

This included plans to boost domestic consumption, raise incomes for the nation's roughly 800 million people living in the countryside and give support for the steel, auto and other industries.

Spending to improve the social safety net will increase 17.6 percent this year to 293 billion yuan, Wen said.

The budget for medical and health care will rise 38.2 percent to 118.06 billion yuan, according to budget papers, with Wen pledging that health insurance would cover 90 percent of the population in three years.

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