|Chinese official warns of risks facing world economy(03/10/04)|
WASHINGTON, Oct. 3 (Xinhuanet) -- Governor of the People's Bank ofChina Zhou Xiaochuan said on Sunday that the world cannot ignore the risks and challenges to sustained growth of the global economy.
Speaking at the annual meeting of the Intern ational Monetary Fund (IMF) and the World Bank, Zhou said that, affected by the geopolitical situation and the dynamics of supply and demand, the rise in the world oil prices has triggered widespread concerns with a marked correlation between financial market volatility and changes in oil prices.
Complex geopolitical issues and terrorism pose threats to global peace and development, he said. The economic structural problems of the major developed countries are having a potentially negative impact on global economic development, exchange rates and even financial market stability.
He also said that the new round of interest rate increases not only will narrow the long- and short-term interest rate spread and squeeze the profitability of financial institutions, but will also increase the financing costs of developing countries.
Zhou pointed out that emerging markets' resilience to external shocks is still weak and the many low-income and developing countries have a formidable task in revitalizing their economies through structural reform. Unfair trade system and lack of external financial assistance are seriously hindering development in these countries.
The Chinese central bank governor said that China appreciates the IMF's efforts to promote global economic and financial stability by strengthening surveillance and China believes that the IMF should place greater focus on surveillance of the major developed countries that have a significant impact on the global economy.
The developed countries should be encouraged to better coordinate their economic policies, maintain exchange rate stability for the major currencies, increase financial aid to the developing countries and open their markets to them, Zhou Xiaochuan said.
The annual meeting of the IMF and the World Bank will end on Sunday. Enditem