The global financial crisis would make it difficult for the country to achieve its economic targets for 2006-10, which were set when the world economy had a positive outlook, a senior official said Wednesday.

Zhang Ping, minister of the National Development and Reform Commission (NDRC), said the global economic downturn posed a “serious challenge” to the country, especially its efforts to realize the social and economic goals set in the 11th Five-Year (2006-10) Plan.

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“We have done a good job in 2006 and 2007 but the worsening global financial crisis poses a serious challenge to us in achieving our goals,” Zhang said.

He made the remarks while reporting to the National People’s Congress Standing Committee how the State Council would fight the financial crisis to realize “stable and relatively fast” economic growth.

In 2006-07, the economy grew at an average rate of 11.8 percent. But the economy slowed down to 9.9 percent in the first three quarters of this year, and from July to September it grew only 9 percent.

Earlier this month, Zhang had said that the country faced “worse-than-expected” risks of an economic slowdown because of the global downturn, and it was “still very hard” to say when the worst would be over.

Since global economic woes have taken a heavy toll on the country the government has lowered its annual economic growth for next year to 8 percent.

But mid-term assessment shows the government has fulfilled most of the Five-Year Plan targets, Zhang said.

The government has basically met the annual targets of employment, trade and urbanization during the mid-term assessment.

But, he said, the country had failed to realize the goals of energy saving, emission control and economic restructuring in the past two years.

The government has set a goal to reduce energy consumption per unit of gross domestic product by 20 percent from 2006 to 2010. But it could cut only 1.79 percent and 3.66 percent in 2006 and 2007.

China’s currency, Renminbi, is likely to join other international currencies to be used for forex reserves by other economies, according to Wu Xiaoling, former vice governor of the country’s central bank and now the deputy head of the financial and economic committee under the top legislature.

Wu made the remarks in her article carried by the latest annual issue of the leading business magazine Caijing.

Wu wrote that China should make preparations in its economic structure and its financial regime for its currency to be internationalized.

Prior to making the Renminbi, also called yuan, a currency used for forex reserves by other economies, it may be allowed to be used for trade settlements between China and some other countries and regions, according to Wu.

In China’s neighboring countries, there were calls for the yuan to be used to settle bilateral trade payments, she said. China has signed settlement agreements with eight neighboring countries, including Russia, Mongolia, Vietnam and Myanmar, assuming a voluntarily choice of settlement currency, she added.

Many were confident of the yuan and willing to settle trade payments in the Chinese currency, as it remained strong, Wu said.

“China should create conditions for the yuan to become an international settlement currency,” she stressed.

It is necessary to expand and deepen the yuan-denominated financial markets and step up the process to realize the full convertibility of the currency and provide investment channels for yuan holders, according to Wu.

Some believed the reason why China was able to remain untouched in the 1998 Asian financial woes was because of its lack of full convertibility under capital accounts. And this was also the factor behind the fact that China has not been so seriously affected by the current global financial crisis.

Wu said China should not become “self-complacent and close itself from the outside world” because of its lack of full convertibility, which was “not a good thing”. Otherwise, the country would be “at a disadvantage when the world economy stabilized and made a takeoff again,”she added.

The Chinese Government has decided to allow the yuan to be used for settlement between Guangdong Province and the Yangtze River Delta and the special administrative regions of Hong Kong and Macao.

Meanwhile, Guangxi Zhuang Autonomous Region and Yunnan Province will be allowed to use Renminbi to settle trade payments with ASEAN (Association of Southeast Asian Nations) members, according to a government announcement on Wednesday evening.

But the Government did not give any details of how and when the pilot currency program would start.

“The move will mitigate the risk of exchange rate fluctuations for Chinese exporters and their trade partners,” Zhao Xijun, finance processor at Renmin University of China, was quoted as saying by Thursday’s China Daily.

Most of China’s external trade is settled in U.S. dollar or the euro at present. But, the paper said, many analysts predicted the dollar might depreciate substantially in the coming years because of the ailing U.S. economy.

“The move will also increase the yuan’s acceptance in Asia, which will help it become an international currency in the long run,” Zhao told the paper.

The yuan’s acceptance has been rising in recent years, thanks to the nation’s economic prowess and its 1.9 trillion reserves of foreign exchange, according to the paper.

BEIJING — Beijing reported 18.01 billion US dollars worth of imports and exports in November, down 5.4 percent from the same month last year.

The global financial crisis also pulled down the growth rate of foreign trade in Beijing by 51 percentage points compared to October.

Exports made up 4.88 billion US dollars, up 3.7 percent, and imports were 13.13 billion US dollars, down 8.4 percent.

According to the customs statistics, the global economic condition is starting to impact foreign trade.

Imports and exports by the processing trade in the Beijing region was 2.77 billion US dollars last month, down 6.5 percent from November of last year and down 9.1 percent from October this year.

Both foreign and domestic firms fared badly in foreign trade in the past month. Overseas-financed companies reported 4.23 billion US dollars of foreign trade last month, down by 18.7 percent from a year ago.

State-owned Chinese firms also saw a decrease of 2.4 percent to 12.6 billion US dollars in foreign trade.

Apart from the export of garment and apparel accessories, which rose by 1.5 percent to reach 1.77 billion US dollars in November, exports of cell phones, steel products, processed oils, coal and coke all fell, according to the customs statistics.

The yuan will be used in transactions with neighboring trade partners as part of a pilot project - in what could be the first step on the road to making it an international currency.

The yuan will be allowed to be used for settlement between the Pearl and Yangtze river delta regions and the special administrative regions of Hong Kong and Macao, the State Council, or the Cabinet, said in a statement yesterday.

The Guangxi Zhuang autonomous region and Yunnan province will be allowed to use the yuan to settle trade payments with ASEAN (Association of Southeast Asian Nations) members.

The pilot program was announced with a raft of other measures designed to help bolster the nation’s export sector. The State Council did not give details of how and when the currency project would start.

“The move will mitigate the risk of exchange rate fluctuations for Chinese exporters and their trade partners,” said Zhao Xijun, finance professor at Renmin University of China.

The lion’s share of China’s foreign trade is currently settled in US dollars or the euro. But many analysts predict the greenback might depreciate substantially in the coming years because of the ailing US economy.

Earlier this month, Zhou Xiaochuan, governor of the central bank, said in Hong Kong that settlements using the US dollar would cause problems if the dollar’s value fluctuates drastically.

The mainland’s trade with Hong Kong, Macao and ASEAN nations has been rising rapidly over the past years to reach $402.7 billion last year, or 20 percent of the mainland’s total trade volume.

“The move will also increase the yuan’s acceptance in Asia, which will help it become an international currency in the long run,” said Zhao.

The yuan’s acceptance has been rising in recent years, thanks to the nation’s economic prowess and its $1.9 trillion reserves of foreign exchange. Over the past year, there has been a growing advocacy at home to make the yuan a global currency, since the weakening of the greenback has caused hefty losses to China’s forex reserves.

But the government has been cautious about moving in that direction, which would also require the yuan to be freely convertible. Analysts say it will take time for policymakers to make the shift as they try to maintain the stability of the currency regime.

The government has made a series of moves in recent months to expand the use of the yuan beyond its borders, which some say would benefit its slowing export sector.

The mainland signed a currency swap deal with Hong Kong on Nov 20. Earlier this year, the government also gave the go-ahead to let Chinese banks issue yuan-denominated bonds in Hong Kong.