UPDATE 3-Wen sees signs of Chinese economy reviving

(Adds Wen on US Treasuries, use of reserves)

By Daisy Ku and Sumeet Desai

LONDON, Feb 1 (Reuters) - Chinese Premier Wen Jiabao said on Sunday he saw signs of recovery in the final days of 2008 after growth in the world's third largest economy slowed abruptly but indicated that further stimulus measures might be needed.

The global financial crisis has hit demand for Chinese exports, fanning fears of social unrest as factories are closed and millions of migrant workers lose their jobs.

"During the last 10 days of December it started to get better. The goods piled up in port started to decrease and the price of industrial products started to rise," Wen told a business audience at a dinner during a visit to London.

The government has already pledged 4 trillion yuan ($585 billion) over the next two years to help boost domestic demand. Work on projects including rebuilding the earthquake-hit southwest and improving road and rail links is under way.

Wen told the Financial Times that more might be needed.

"We may take further new, timely and decisive measures. All these measures have to be taken pre-emptively before an economic retreat," he said in an interview published late on Sunday.

A plan to enable the use of some of China's huge foreign currency reserves for domestic purposes is under discussion, he told the paper.  Continued...