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China's measures to stabilize economic growth boost global confidence

(Xinhua)

08:04, October 16, 2012

BEIJING, Oct. 15 (Xinhuanet) -- Against the backdrop of lackluster economic growth worldwide, measures introduced by China this year to stabilize the growth boost global confidence.

Yi Gang, vice governor of the People's Bank of China (PBOC), China’s central bank, said that China will continue to press ahead with the International Monetary Fund (IMF) reform package and deepen the cooperation among BRICS.

Yi made the remarks in an interview with Xinhua on Friday in Tokyo where he was attending the IMF and the World Bank (WB) annual meeting.

The WB and IMF lowered their forecast for the global economic growth for 2012 to 2.3 percent and 3.3 percent, respectively.

Yi Gang said that this signaled an increasing possibility of growth below 2 percent. If this is to become a reality, he said, the developed countries would have plunged into further recession while emerging economies encountered further dramatic slowdown.

Now on the brink of recession, the global economy faces many challenges, including the European debt crisis, mounting U.S. deficits and stagnant growth in developing countries, Yi noted.

Therefore, the biggest concern is how to stabilize growth and create jobs, and how to further coordinate the macro-economic policies of major economies to tide over the hard times.

The PBOC official said that China, the world’s second largest economy, is pinned on high hopes by other countries, as it has played an important role in overcoming difficulties and pursuing recovery.

But he noted that China is still a developing country and it is unrealistic to let China pull the world economy out of the mire on its own.

However, China’s economic stability, especially its related measures this year, are good news for the world and boost global confidence.

Yi said other countries are concerned about China’s economic prospect and the development trend of the real estate market.

Unlike some others where the deficit-to-GDP and national debt balance-to-GDP rations are that high, Yi stressed, China "has plenty room in using various kinds of policy tools."

On the IMF reform package, Yi said that China has been making every effort in advancing the reform package, and that as long as each country finishes its approval procedures; the whole package will be carried out thoroughly.

Moreover, Yi said China and other BRICS members Brazil, Russia, India and Russia discussed the possibility of strengthening cooperation by instituting a mechanism that can provide liquidity in case of emergency or crisis.

While speaking positively of the quantitative easing measures taken by the central banks in the U.S. and some European countries, an IMF report warned of their potential inflation pressures on emerging economies.

On China’s economy, Yi Gang said, the measures' pressure or influence will "differ depending on different industries and regions."

But he made it clear the Chinese government will limit the adverse effects to the minimum and draw up remedy measures.

He noted that policy makers should be foresighted and precautious in drawing macro-economic policies, and spot risks in economic trend promptly for corresponding measures.

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