China May Feel Global Slowdown

The slumping world economy will affect China since the country has strong economic ties with foreign countries, Chinese Finance Minister Xiang Huaicheng said yesterday. Despite this, he added, China will maintain strong growth this year.

Finance Minister Xiang Huaicheng yesterday admitted a slowdown of the world economy will affect China.

"The world slump, including the slowdown in the US economy and the stagnation in Japan's economy, does have some bearing on China's growth, because China has strong economic ties with foreign countries," Xiang said at a joint press conference with US Treasury Secretary Paul O'Neill.

According to Xiang, China's exports contributed about 40 percent to the total gross domestic product. In June, China's exports witnessed a negative growth of 0.6 percent, while export growth in August were almost zero.

"But how much of an effect the world economy will have on China will depend on what macroeconomic policies China will carry out," Xiang added.

China will continue to carry out a proactive fiscal policy to expand domestic demand, he said, expressing confidence that China's economy would maintain strong growth this year.

"I'm prudently optimistic that China's economy will grow by 7 percent or more," he said.

Xiang and O'Neill spoke to journalists following the 14th Session of the China-US Joint Economic Commission.

They said the two sides held extensive and constructive discussions on a range of economic issues, reaching some important agreements.

Both sides agreed that multi-lateral development banks (MDB) should be committed to improving productivity - the most essential element in raising living standards.

MDBs, through their resource transfers, should be catalysts for using market mechanisms to enhance access to, and efficient use of, domestic and international capital.

The two ministers also said that the stable development of multilateral and bilateral economic and trade relations is in line with the long-term interests of both economies.

They welcomed China's accession to the World Trade Organization (WTO), based on existing commitments, and called upon other WTO members to support the launch of a new round of multilateral trade negotiations this November in Doha as a way to promote further long-term global growth and prosperity.

"I'm very hopeful and expect that there will be a resolution in a positive way in the near future, and that China will rapidly succeed with the WTO," O'Neill said.

( 09/12/2001)

In This Series

Morgan Stanley Chief Economist: China Stands Tall

Chinese Economy Faces 5 Major Challenges

China Sees GDP Growth of 7.9% in First Half

China's Economy to Hold Steady

China Economy Grows at 8% from Jan to Jun



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