China is "deeply worried" about the state of the US and global economies and about the impact from the continuing weakness of the dollar against other currencies, Wen Jiabao, the country's premier, said yesterday.

Mr Wen, speaking at his annual news conference at the close of the National People's Congress, said he was confident China would maintain "fast and steady" growth this year. But it could not avoid the impact of a downturn elsewhere.

"Global economic developments cannot but have an impact on China," he said. "2008 might be the most difficult year for China's economy, because there are a lot of uncertainties both inside and outside the country."

Chinese policymakers are grappling with conflicting pressures, trying to control inflation, which has hit 12year highs, without slowing the economy too much when they need to create millions of new jobs a year.

Mr Wen acknowledged that China might struggle to keep inflation to its forecast figure for 2008 of 4.8 per cent, after January and February recorded monthly inflation rates of 7.1 and 8.7 per cent respectively. But he said he had not changed the goal because it underlined the government's determination to fight inflation. "When prices rise fairly fast, inflationary expectations become more dangerous than price rises themselves."

On the issue of whether he would sacrifice economic output to bring down inflation, at the risk of increasing unemployment, Mr Wen indicated that growth re-mained the overarching priority. "We must ensure that our economy will grow . . . in order to ensure employment," he said. "China is a developing country with 1.3bn people. We have to maintain a certain degree of fast economic growth to provide enough jobs."

He said China needed to add about 10m jobs a year for the next five years, a lower figure than in the past when the aim was growth of 15m-20m jobs a year.

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