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The international community should clearly recognize the prime risks to global economic recovery and all countries should actively participate in policy coordination and cooperation and strive to maintain sustained global growth, Governor of the People's Bank of China Zhou Xiaochuan said on Saturday.
In a written speech to the International Monetary and Financial Committee held in Washington, Zhou said that the vulnerability affecting global economic growth since the Dubai meeting in last September has by no means been entirely eliminated. Geopolitical confrontation persists, and the debt remains a very conspicuous problem in some emerging markets.
Although the global economy shows obvious momentum toward recovery, it is still true that the global economy relies excessively on condition in certain individual countries, he said. Therefore, great uncertainty remains as to whether the US economy has entered a period of stable growth.
Zhou also said that uncertainties in the timing and magnitude of macroeconomic policy adjustments by the major industrial nations are putting the world economic trends at increasing risks.
If an interest rate hike is not well timed, or if it is not executed with proper intensity, the result might be a short-term upheaval in financial markets, which would in turn adversely affect the global recovery, he said.
He also pointed out that structural reforms in some industrial countries have been slow, which has had a direct impact on stable economic growth and sustained development.
Meanwhile, Zhou warned that the debts of some emerging markets and developing countries are not likely to remain sustainable and geopolitical tensions show no clear sign of abating.
Therefore, he said that main industrial countries should assume the primary responsibility for global economic recovery and adjustment. They need to increase market confidence, give free rein to their comparative advantages, gradually improve external account conditions and enhance the sustainability of growth.
Emerging markets and developing countries also should vigorously take advantage of the current favorable environment brought on by the economic recovery, he added.
The International Monetary and Financial Committee is the policy-making body of the International Monetary Fund.
(Xinhua News Agency April 26, 2004)
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