By John Sexton
Speaking at a press conference in Washington today, IMF Managing Director Dominique Strauss-Kahn said that while the Fund expected Chinese growth to come in below 7 percent in 2009, the government target of 8 percent was achievable. He said Asia as a whole would likely stage a strong recovery in 2010 but warned that regional performance depended on an overall recovery in the global economy.
Mr Strauss-Kahn said that while Asia was not the epicenter of the 2008 crisis it had been hit hard by the decline in world trade and capital flows. He said that the idea of decoupling of the Asian economies had been proved wrong by experience, and ruled out the idea of a separate regional recovery saying that given the extent of linkages "no player can play alone." He added that given the dynamism of the region's economies "once the world economy regains its footing Asian recovery will be rapid."
The IMF is forecasting overall Asian GDP growth of 2.7 percent in 2009, with developing Asia growing at 5.5 percent. The Fund's Asia growth forecast for 2010 is over 5 percent. The IMF official forecast for China is 2009 growth of 6.7 percent, but Mr Strauss-Kahn did not rule out a higher figure, saying that the Chinese government's target of 8 percent was "challenging, but possible." In December last year Mr Strauss-Kahn had suggested China's GDP might grow by as little 5 percent in 2009.
Mr Strauss-Kahn applauded the fiscal stimulus measures already taken by the Chinese government but added that China had considerable leeway to take additional measures and welcomed signs that the government was planning to do so.
Asked about the value of the Chinese currency, Strauss-Kahn said that all sides, including the Chinese government agreed that the yuan was overvalued, but he played down the significance of the issue in the current context. "It might be the main problem in a quiet period but today we need to concentrate on recovery," he said.
(China.org.cn February 3, 2009)
