WASHINGTON (Bloomberg) - China will address "structural problems" and stabilise its economy by increasing domestic demand, Premier Wen Jiabao said.

Wen, in an interview with CNN, said he had argued before the global recession that China's economic development "lacks balance, co-ordination and sustainability." The financial crisis "reinforced my view on this point", he said on the "Fareed Zakaria GPS" programme taped on September 23 in New York and broadcast yesterday.

"We can rely on stimulating domestic demand to stabilise and further grow the Chinese economy," Wen, 64, said. The premier also said he's concerned China's stability may be threatened by inflation and corruption and that he remains committed to pressing for changes in China's political system.

China's economy has expanded more than 90-fold in the past three decades, fueled by exports to countries such as the US Treasury Secretary Timothy Geithner and US lawmakers have urged the country's leaders to look more to domestic markets for growth. They have also pushed China to allow faster appreciation of its currency, arguing that an undervalued yuan gives Chinese manufacturers an unfair advantage in export markets.

The US trade deficit with China widened to $145 billion in the first seven months of this year, from $123 billion for the same period in 2009.

Wen criticised some US lawmakers for pressing China to increase the value of its currency.

"Some people in the United States, in particular some in the US Congress, do not know fully about China," Wen said. "They are politicising the problems in China-US relations."

On September 29, the US House passed legislation prodding China to raise the value of the yuan. Under the bill, US companies would be allowed to petition for duties on imports from China to compensate for the effect of an undervalued yuan.

The yuan gained 1.74 percent last month, the biggest monthly advance since a dollar peg was ended in July 2005, according to data compiled by Bloomberg.

China's goal is to have "balance and sustainable trade with other countries", Wen said. "China does not pursue a trade surplus."

China supports a stable euro and won't reduce its holdings of European bonds, underlining the strengthening ties with the European Union (EU), Wen told Greek lawmakers during a visit in Athens yesterday. Wen said he hopes to improve the domestic investment climate in China and that the EU eases restrictions on high-tech exports and rejects protectionism.

Wen, who next travels to Belgium, Italy and Turkey, said on October 2 that China plans to buy Greek bonds once Greece begins tapping international markets for funding again. China will support the country's shipping industry, as Greece seeks investment to emerge from a second year of recession, Wen said.

Wen told CNN that after China's four trillion-yuan ($600 billion) economic stimulus programme, controlling inflation is a priority. Inflation "is something that I have been trying very hard to manage appropriately and well", Wen said. "Corruption and inflation will have an adverse impact on the stability of power in our country."

Wen is trying to cool down the country's property market as house prices soar and become increasingly unaffordable for China's middle class. Last month, China's government added to curbs by tightening down-payment rules for first homes, suspending third-home loans and pledging to quicken a trial of a property tax.

China's plan to stimulate the economy with government spending has been a success, ensuring "the continuance of steady and relatively fast economic growth", Wen said.

Economic growth moderated to 10.3 percent in the second quarter from 11.9 percent in the previous three months. The pace may slow to 8.7 percent in the fourth quarter, according to the median estimate in a Bloomberg News survey of economists.

Still, China's manufacturing expanded at the fastest pace in four months in September, adding to signs that economic growth is stabilising.

Wen said the $814 billion US stimulus package and Obama's goal of increasing exports are helping the American economy.

"Although they came a little bit late, they still came in time," Wen said.

With its tradition of "scientific and technological talent and managerial expertise," the US "will tide over the crisis and difficulties," Wen told CNN. "We must have confidence in the prospects of the US economy."