Premier Wen Jiabao has called for greater efforts to strengthen the vitality and dynamism of economic growth.
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Speaking during an inspection tour of southwest China's Sichuan province from Friday to Sunday, Wen said the economy is running at a slower but more stable pace.
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"The economic growth rate is still within the government target range set early this year, and stabilization policies are working, " Wen said.
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In March this year, the nation pared its gross domestic product (GDP) growth target for 2012 to 7.5 percent from the previous 8 percent, in the face of a persistent slump in the United States and spreading debt woes in the European Union.
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Dragged down by lackluster external demand and government efforts to cool the property sector, the country's GDP growth slowed to a three-year low of 7.6 percent in the second quarter.
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Wen said China's economic fundamentals remain sound and the country still enjoys huge growth potential, citing the bumper summer harvest, cooling inflation and rising incomes.
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However, the country's economic rebound is not yet stable and economic hardship may continue for a period of time, the premier warned at a conference on Saturday in Chengdu city attended by provincial officials from Henan, Hunan, Guangxi, Sichuan and Shaanxi.
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In the second half of the year, the government will "increase efforts to preset and fine-tune its policies, and make policies more targeted, foresighted and effective," Wen said.
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The government will combine stabilizing investment with implementing mid- to long-term development plans, promoting urbanization and agricultural modernization, improving people's livelihoods, upgrading industries, exploring emerging markets and encouraging private investment, Wen said.
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More efforts must be done to deepen reforms of income distribution, raise people's incomes, improve the social networks and create more jobs especially for college graduates, he added.
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During a meeting with local entrepreneurs, Wen urged the business people to step up research and development to cope with shrinking exports and rising production costs.
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Liu Qiongying, president of Aiminer Leather Products Co., said the company's products are highly value-added and 95 percent are made for exports. But the company faces difficulties because of rising labor and raw material costs.
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Enterprises should bring their initiatives into full play and strengthen research and development to upgrade their products, Wen said, pledging to provide preferential financial and tax policies.
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Chen Jinbin, head of the Sichuan branch of Kerry Eas Logistics Co., said his company's revenues rose 31 percent year-on-year to 8 billion yuan (1.27 billion US dollars) in the first half.
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Wen said the government should pay more attention to the logistics industry, as "smooth logistics can boost consumption, which will then help enlarge production."
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The government encourages logistics companies to grow strong through mergers and acquisitions and by relying on information technology, he said.
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During a visit to Chengdu Rainbow Appliance Group Co., Wen was pleased to know that the company's first-half sales and profits increased 14 percent and 19 percent, respectively.
"The company not only provided over 1,400 jobs for local people, but also created market demand. I hope there will be an increase in the number of companies like this one," Wen said.
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Some entrepreneurs from private companies said they hope the government will give more support to proprietary brands in government procurement and reduce tax burdens on mid- to small-sized high-tech companies.
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Wen said the government will create a fair market environment for private companies, encourage them to participate in major scientific and technological projects and increase support to small and micro private firms.
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Private companies have vitality, great adaptability and growth potential. They will achieve greater development with government policy support, Wen noted.Â