China vice premier sees chronic global recession

China's Vice Premier Wang Qishan speaks during a news conference at the Foreign Office in London in this September 8, 2011 file photo.

BEIJING (Reuters) - A long-term global recession is certain to happen and China must focus on domestic problems, Chinese Vice Premier Wang Qishan has said.

"The one thing that we can be certain of, among all the uncertainties, is that the global economic recession caused by the international financial crisis will be chronic," Wang was quoted by the official Xinhua news agency as saying at the weekend.

Wang's comments were the most bearish forecast ever by a top Chinese decision-maker about the world economy, and Beijing's worry about a worsening global environment could translate into an impetus for pro-growth policies at home.

China launched a massive fiscal stimulus package with a price tag of 4 trillion yuan ($650 billion) in late 2008 to avert a big impact from the global financial turmoil.

According to Xinhua, Wang did not speak this time about any major policy change but reiterated that banks should be more flexible lending to the agricultural sector and small firms.

"As for our country, which relies highly on external demands, we must see the situation clearly and get our own business done," Xinhua quoted Wang as saying, referring to exports.

China's central bank, which sometimes has to report to Wang, who is in charge of China's financial sector, said last week that it is ready to fine-tune monetary policy if needed.

At a meeting of local government officials and financial executives in the central province of Hubei on Saturday, Wang said local financial institutions such as city commercial banks and credit cooperatives should not seek to expand their business beyond their regions.

Wang also urged banks to pay close attention to the international financial situation. Xinhua did not give further details.

(Reporting by Zhou Xin and Benjamin Kang Lim; Editing by Paul Tait)