China has set itself a target of 8 per cent growth this year, despite admitting that the global crisis had hit it so hard that fulfilling it would be a “tall order”.

Wen Jiabao, the Chinese Premier, told the World Economic Forum that the financial crisis had had a “rather big impact” on his country’s economy.

Growth in China hit 9 per cent last year, but declined dramatically to 6.8 per cent in the final quarter of last year, the slowest pace for seven years.

The International Monetary Fund predicted yesterday that China’s growth would slide to 6.7 per cent this year. “We think we must maintain growth at 8 per cent this year,” Mr Wen said when asked how China would ensure social stability. “This is necessary and can be managed through hard work.”

Among China’s key challenges, he said, was rising unemployment in rural areas, as well as shrinking demand for its exports, which has led to rare protests by factory employees who have lost their jobs.

Mr Wen outlined measures that Beijing was taking to shore up and stimulate domestic demand, including greater social security, a government spending programme and tax cuts. In addition, he said, there would be industrial restructuring, with the phasing out of outdated production practices and particular attention paid to the key industries of cars, iron and steel.

“Will China’s economy continue to grow fast and steady? Some people may have doubts about it, yet I can give you a definite answer,” Mr Wen said. “Yes, it will. We are full of confidence.”

As many as four million Chinese migrant workers lost their jobs last year as overseas orders for products, including electrical appliances, toys and textiles, shrank. Exports fell the most in almost a decade in December, causing a knock-on effect on import levels of raw materials.

Much of the world has been looking to China to play a leading role in addressing the crisis. Mr Wen said that the country’s underlying economy was in good shape but added that it was the world’s responsibility to create conditions for a recovery.

The address was Mr Wen’s first to the audience at Davos. The thrust was a call to the rest of the world to project collective confidence in the face of the crisis. “It is our responsibility to send to the world a message of courage, confidence and hope,” he said.

That message came in stark contrast to the gloom expressed by many business and political leaders at the summit. The loss of $50 trillion of personal wealth had left people depressed and traumatised, Rupert Murdoch, the chief executive of News Corporation, parent company of The Times, said.

“The crisis is getting worse,” he told a press conference. “It’s going to take drastic action to turn it around, if it can be turned around quickly. Personally, I believe it will take some time.

We’ve been living in the Western world way above our means. We’ve been on a great binge and it’s come to an end and we have to live through the correction.”

Mr Murdoch said that people were shocked by the events of the past year, during which stock markets have plunged and housing markets have collapsed in many countries.

“The great majority of the people in the world are depressed and traumatised by the fact that their savings, the wealth in their homes or pension funds . . . a big percentage of it has disappeared.”

The solution, he said, was not to be found in overrestrictive regulation or a rejection of capitalism.

“Don’t let’s lose sight of what creates wealth in this world: it is open markets, it is capitalism and we have proved this again and again in the last century,” he said.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive