IMF Chief Confident in China's Economic Reform

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Last updated at: (Beijing Time) Monday, September 01, 2003

IMF Chief Confident in China's Economic Reform

Horst Kohler, managing director of the International Monetary Fund (IMF) said he had confidence that China would make its way forward in the economic reform process.

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Horst Kohler, managing director of the International Monetary Fund (IMF) said he had confidence that China would make its way forward in the economic reform process.

Kohler made the remark when addressing a luncheon here Monday hosted by the People's Bank of China, the central bank, in the second day of his China tour.

Kohler believed the recent establishments of the China Banking Regulatory Commission and creation of the State Assets Supervisionand Administration Commission would play a positive role in the country's economic reform, especially in the reform of the sectorsof state-owned enterprises and public finance.

Meanwhile, the IMF chief expressed the willingness that the IMFwould offer help for China to push forward the economic reform process.

"The IMF can help China in its reform efforts through our expertise and the experience drawn from our work with member countries."

Global recovery prospects have improved

The prospects for recovery in the global economy have improved, said Kohler.

Addressing a luncheon, Kohler said there are increasing signs of an economic rebound in the United States, expectations of a pick-up in Europe have improved, and a tentative recovery also seems to be taking hold in Japan.

Kohler said Asia remains a bright spot in the world economy, citing its GDP growth of over 6 percent in 2002. He noted that China's strong growth, averaging about 9 percent per year over the last decade, has been an important factor supporting Asia's growth.

Kohler called for advanced countries to tackle their deep-seated structural problems as part of the cooperative efforts to ensure a gradual and orderly correction of large global current account imbalances. He said greater exchange rate

flexibility in Asia should also be part of a gradual process of reducing global current account imbalances.

China's growth significant for global economy

China's rapid growth and expanding trade have significant potential benefits for both the global and regional economies, said the managing director of the International Monetary Fund (IMF).

Kohler said during a luncheon address that China is contributing to regional growth, "as evidenced by its large and expanding role in intra-Asian trade."

"Rising imports of goods to satisfy domestic demand have made China an increasingly important export destination for many of its trading partners. The expansion of China's trade within Asia has also contributed to rising specialization of production in the region, allowing countries to better exploit their comparative advantage," said the managing director.

China's growing presence in world markets has "clearly increased competition for some producers in other countries, but it also has benefited consumers worldwide," he noted.

Kohler said China's transformation toward a market-based economy and its integration into the global economy have been "dramatic economic developments" for itself as well.

"The process of gradual market-oriented liberalization that China has followed has served the country well. And China's recent steps in line with its commitments under the World Trade Organization accession agreement have further contributed to the rapid expansion of trade and real incomes," he said.

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