By James Reynolds

BBC News, Beijing



Hu Jintao said the economic crisis would test the Communist Party

China's President Hu Jintao has warned that the global financial crisis could weaken his country's competitiveness.

Mr Hu gave his warning at a meeting of the Politburo and his words have been made public by the state media.

As growth slows, Mr Hu said that in the coming period China would starkly confront the effects of the international financial crisis.

And he warned that the economic situation was a test of the Communist Party's ability to govern.

"External demand has obviously weakened and China's traditional competitive advantage is being gradually weakened," Mr Hu said, according to the official People's Daily newspaper.

"Whether the pressures can be turned into a driving force and the challenges turned to opportunities ... is a test of our ability to control a complex situation, and also a test of our party's governing ability," he added.

Action

Recent figures show that the government has cause to be worried.

Growth has slowed to 9% - and predictions say that it may drop to 7% or 8% next year.

These are dazzling figures for some economies, but there's a widespread belief - even a superstition - in China that growth needs to stay above 7% in order for social stability to be maintained.

China has already taken action.

This past week the central bank carried out the biggest cut in interest rates in more than a decade.

And earlier this month, the government announced a stimulus package of $586bn (£380bn).

This is enough, the Communist Party will hope, to get this country through the next year or two.



