China’s growth will help recover world economy, says World BankJune 9th, 2009 - 5:30 am ICT by IANS
Montreal, June 9 (Xinhua) World Bank President Robert Zoellick said Monday the Chinese economy is likely to make a strong comeback which will help pull the world economy out of recession.
Zoellick made the comments in a question-and-answer session at the ongoing four-day International Economic Forum of the Americas in Montreal.
Despite the global economic crisis, China has been able to build up its reserves and launched the second-largest stimulus programme after the US, he said, adding that “in the first quarter they have slightly better than expected numbers”.
China’s recovery is not without risks, he said, “but by and large, it has not only been a stabilising force in the global economy, but a force that will pull the global economy out of the downturn”.
Zoellick welcomed China’s efforts to make its currency more international.
“Ultimately, that’s a good thing, if you’ve got some multi-polarity of reserve currencies, to make sure that people manage them well,” he said.
He said it is crucial that Washington and Beijing “work out their differences”, such as past concerns about whether the Chinese government is “manipulating” its currency.
“In this environment, if you had protectionism burst out on one side or the other, or if there is doubt put in about financial markets, those are the type of factors that could make a fragile situation worse,” he said.
Zoellick said he sees no need for governments to add further stimulus to ensure a global economic recovery.
He said the key issue now is “how to combine the stimulus with making the credit system work, clean up the banks”.
In a statement released before the speech, Zoellick warned that while there are signs of global recovery there remain dangerous risks that could reverse progress, including the threat of protectionism.
“Right now, there is a low-grade fever; it isn’t full influenza, but we need to keep a close watch because as unemployment numbers go up, politicians are under stress and some of them may turn to protectionism,” he said.
Also, he said that the financial crisis has compounded challenges for vulnerable countries and it is important that higher income countries maintain their support for development while they manage their own financial and economic problems.
Tags: answer session, chinese economy, chinese government, close watch, economic forum, economic recovery, fragile situation, global economic crisis, global economy, global recovery, low grade fever, president robert, protectionism, reserve currencies, robert zoellick, stimulus, unemployment numbers, world bank president, world economy, xinhua