World Economic Forum: Wen Jiabao to address conference

China's Premier, Wen Jiabao, will address more than two thousand delegates at the World Economic Forum in Tianjin later on Tuesday.

His address comes amid signs that China's economy may be slowing faster than previously thought.

Manufacturing and export growth have slowed, while imports have dipped, raising concerns about a decline in both external and domestic demand.

That has led to fears that Beijing may miss its growth target for 2012.

Analysts said the delegates at the forum will be following the speech closely to gauge how China hopes to sustain its growth amid an uncertain global economic environment.

"This is an international gathering and you have investors from all over the world meeting in China's own backyard," Tony Nash, Managing Director at IHS Global Insight told the BBC. "

"They will like to get some reassurance from the premier that policymakers are doing all they can to ensure that China's high levels of growth are maintained in the near term."

'Much more proactive'

Two of the biggest drivers of China's economic growth in the past few years have been the success of its export sector and an investment boom in the country.

However, both these sectors have seen a slowdown in recent times.

China's exports have been hurt by slowing demand from key markets such as the US and eurozone. And because the economic climate in those two regions has failed to improve, the sector is likely to see slowing growth in the coming months.

At the same time, investment growth in China has slowed after measures to curb lending were introduced.

The state wanted to keep property prices from rising too sharply and forming asset bubbles.

However, there have been concerns that those measures may have backfired.

Prompted by such fears and continued weakness in the global economic environment, China has eased its policies to try and boost lending and investment again.

It has cut interest rates twice since June and also lowered the amount of money that banks need to keep in reserves three times in the past few months.

The measures have seen lending surge.

According to data released on Tuesday, Chinese banks extended 703.9bn yuan ($111bn; £69bn) in new loans in August. That is up from 540bn yuan in July.

Last week, the government also approved infrastructure projects worth more than $150bn.

Analysts said the increase in lending and a push for new infrastructure investment was likely to help boost growth.

"This is basically consistent that the policy stance is much more proactive and more loose than before, because they saw the risks to the economy," said Zhiwei Zhang, chief China economist at Nomura.

"I think we'll continue to see infrastructure spending is pretty strong. We're predicting a pretty sharp recovery in the fourth quarter, a very strong rise," he added.

Spain euro crisis: Rajoy rejects bailout conditions

Spain's Prime Minister Mariano Rajoy has said he will not accept outside conditions over a possible bailout.

Mr Rajoy made the pledge in his first television interview since taking office. But he said no decision to request a bailout had been taken.

Last week, the president of the European Central Bank (ECB) unveiled plans to buy bonds from indebted countries - under bailout conditions.

Mario Draghi said the ECB would provide a "fully effective backstop".

The aim of the programme was to cut the borrowing costs of debt-burdened eurozone members by buying their bonds.

The Spanish government's implied borrowing costs fell sharply after the announcement.

Pensioners reassured

"I am absolutely convinced that everyone will be reasonable but I insist that we haven't taken a decision," Mr Rajoy told Spanish state television.

"I will look at the conditions. I would not like, and I could not accept, being told which were the concrete policies where we had to cut," the prime minister added.

And he promised that pensioners would not be affected by any decisions.

Under Mr Draghi's plan, the ECB would agree to buy a potentially unlimited amount of bonds of debt-stricken eurozone members on the condition that these countries made a formal request for bailout funds and stuck to the terms of any deal.

Mr Draghi said the ECB would engage in outright monetary transactions, or OMTs, to address "severe distortions" in government bond markets based on "unfounded fears".

OMTs will be carried out only in conjunction with European Financial Stability Facility or European Stability Mechanism programmes, he said.

In other words, countries will still have to request a bailout before the OMTs are triggered.

The maturities of the bonds being purchased would be between one and three years and there would be no limits on the size of bond purchases, he added.

The ECB will ask the International Monetary Fund to help it monitor country compliance with its conditions.