China is playing a key role in Gobal economic recovery

Discussion in 'Current Events' started by longriver, Nov 17, 2009.

  1. longriver
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    longriver BANNED

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    Mr. Strauss-Kahn Managing Director of the International Monetary Fund (IMF),set his comments in the context of the major challenges facing the world as it begins to emerge from the global crisis.

    Securing the Recovery.

    He said that the recovery remains in place while the global economy is improving.

    In China, he said that the government’s commitment to maintain fiscal stimulus into 2010 will be important for supporting growth. “As the government also recognizes, however, the time has come to begin slowing the very rapid pace of loan growth which raises risks of overinvestment, overcapacity and, ultimately, bad loans.”

    Rebalancing the Global Economy. Mr. Strauss-Kahn said that in economies that have run large current account deficits—such as the United States—national saving should increase.

    “China’s leadership has already articulated a clear vision for how to boost private consumption,” he added. “A stronger currency is part of the package of necessary reforms”.

    Reforming the International Monetary System.

    Mr. Strauss-Kahn noted that there had been a number of proposals for how to improve the international monetary system, including from prominent figures in China.

    At the same time, he saw the need for strengthening global financial insurance measures and he said that—provided additional resources were forthcoming—the IMF could play the role of “global lender of last resort.” He added that regional reserve pools also played an important role.

    The New Global Governance Framework.
    Mr. Strauss-Kahn said that the transformation of the G20 into a key forum for fostering the international policy dialogue is a historic development—with representation of six Asian countries, including China.

    “The world order is changing,” he concluded. “Asia will play a vital part in making the most of this historic opportunity. And China, no doubt, will play a leadership role in making the changes needed to embark on a new growth path that secures long-term economic success for all nations.”

    Press Release: China's Leadership Key in Global Economic Recovery and Reform, IMF Managing Director Dominique Strauss-Kahn Says

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  2. william the wie
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    william the wie Gold Member

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    As opaque as China's books are the lowest guesstimate I have seen for zero real growth is a reported real growth of 7%. There is always some air in any government's estimates of a country's growth. Hedonics, core inflation and other accounting gimmicks cause most investors to discount the first 2% of US growth, 3% of Japanese growth and so on. So that 7% discount for Chinese growth is not anywhere near the worst for developed nations but it is pretty bad and could easily be an overestimate since it is based on the Baltic Dry Index for the most part. Financially China is a black box.
     
  3. The_Halfmoon
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    The_Halfmoon Member

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    yah, but at the end of the day we can say:

    a) huge population willing to work for less than in most western countries
    b) a culture of education, saving, and social order
    c) a good position re: cash reserves

    these are things that make me think China's economy will get better in the long run. But of course, yes, the exact financials are not as clear which means many potential ups and downs until it gets there.
     

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