World Bank President Robert Zoellick said Monday that Chinese economy is likely to make a strong comeback and that will help pull the world economy out of recession.
Zoellick made the comments in a question-and-answer session at the on-going 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 program after the United States, 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 stabilizing 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. And ultimately it's good if you've got, I think, some multipolarity of reserve currencies to create, 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 take a fragile situation and make it worst," he said.
Zoellick said he sees no need for governments to add further stimulus to ensure a global economic recovery.
Rather than focus on stimulus, 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.
(Xinhua News Agency June 9, 2009)
