The annual Central Economic Work Conference, chaired by President Hu Jintao and Prime Minister Wen Jiabao, wrapped up after three days with a macroeconomic policy blueprint for next year, the government said.

"The development of our nation's economy faces many challenges in 2009, but also many opportunities," said a communique issued by the conference and carried on state television.

"To overcome the serious influence of the international financial crisis and carry out next year's economic tasks in a good way is of vital importance to safeguarding the stability of the reform and opening programme and fulfilling ... our plan to build a well-off society."

The work conference called for expanding domestic demand, maintaining "fastpaced" economic growth by weaning the nation away from its dependency on exports, the communique said.

The central bank was specifically tasked with creating a "suitably relaxed monetary policy" capable of advancing economic growth, the People's Bank of China said in a statement posted on its website on the conference.

"We will use all monetary tools to flexibly adjust the supply and demand for capital and adopt stronger measures to support the development of small and medium enterprises," the bank said.

The 2009 macroeconomic policy was described in broad-brush strokes with detailed plans expected to be put before and approved by China's annual session of parliament in March.

"The main tasks facing China's economy is to stimulate investment and consumer spending, so we should be seeing some fiscal measures aimed at lowering taxes," the China News Service quoted Zhao Xijun, a finance expert at the People's University, as saying.

"Monetary policy is likely to be relaxed and we will see further cuts in lending and deposit rates and we shouldn't rule out an increase in bank loans."

During the conference, leaders had been expected to discuss a proposal by the finance ministry to let the 2009 fiscal deficit swell to 280 billion yuan (40.7 billion dollars), up 56 percent from this year, to help maintain growth, media reports said.

In the past few months Beijing has already introduced a series of monetary and fiscal policies aimed at blunting the impact of the global meltdown, including a four-billion-yuan spending package and steep interest rate cuts.

"The fundamental problem facing China's leaders is income distribution which is resulting in a surplus in industrial goods and property... as the global economy slows down," Andy Xie, an independent economist in Shanghai, told AFP.

"What China needs are strong capital measures that can make industrial goods and property affordable to people."

China's economic growth slowed to 9.0 percent in the third quarter of this year as global financial woes started taking a toll, prompting the government to announce its stimulus package.

As a result of the slowdown, growth in the world's fourth-largest economy weakened to 9.9 percent over the first three quarters of the year.

Ahead of the three-day conference, Chinese economists predicted the government would target an eight percent economic growth rate for 2009, a pace that would be the minimum required to keep the unemployment situation under control.

"The meeting will detail measures for achieving at least eight percent growth in 2009," said Song Hong, a researcher with the Chinese Academy of Social Sciences (CASS), a top government think tank.

November foreign investment in China down 36.5 pct
Foreign direct investment in China fell by more than a third in November from a year earlier, the government said Wednesday, as the economic crisis dealt another blow to the country's economy.

Foreign direct investment (FDI) in November totalled 5.3 billion dollars, 36.5 percent lower than a year earlier, the commerce ministry said in a statement.

Month-to-month FDI figures can be volatile because one major deal can have a dramatic effect, but analysts said November's figures were likely the start of a longer term trend.

"The direction of China's economy is far from optimistic, discouraging foreign investors to enter," said Sherman Chan, a Moody's Economy.com analyst.

China's monthly FDI was likely to continue to fall until at least mid-2009 as the global economy continues to deteriorate, Chan wrote in a note.

However, she said China's FDI would be one of the first indicators to rebound once the global recovery begins.

The FDI for the first eleven months of the year rose 26.3 percent compared with the same period last year, the ministry said.

Foreign companies invested 86.4 billion dollars in the country in the period from January to November, it said.

The growth rate for the period was sharply slower than the 35.1 percent rise in the first ten months of the year.

FDI is one of the factors driving the rapid growth of China's foreign exchange reserves, which topped 1.9 trillion dollars at the end of September.

The November decline covers a period where business deals around the world ground to a standstill because lending dried up.

"It's a reflection of the global liquidity squeeze," said Ren Xianfang, a Beijing-based analyst with Global Insights.

The worsening profits outlook for Chinese companies also slowed the flow of outside investment, Industrial Bank economist Lu Zhengwei said.

"Since the beginning of this year, many export oriented factories in China had either gone bankrupt or were forced to close down," Lu said.

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