At the special forum of "Forecast on the Future Development of World Economy" opened on November 21, Frank Gong, chief China economist with JPMorgan Chase in Hong Kong noted that uncertainties in global economy, RMB reform as well as banking system will become three major risk factors to shape China's economy next year.

Gong said that the future development of US' economy will determine the risks of global economy, especially whether the US could bear the duel pressures of oil price hike and soaring interests rates. If high oil price and high interests rate go on for next year, the environment of global market economy will undergo massive changes.

"US Federal Reserve will definitely raise the interests rates, however, current oil price is undergoing a relatively long period of climbing. By taking that kind of situation into consideration, it is an inevitable tendency the price of oil and commodity will continue to rise," further added Gong.

Gong held another problem is the RMB reform. Compared with the rise of interest rate, the reform of foreign exchange rates and RMB appreciation could maintain domestic low-interest-rate environment, stimulate consumption and decrease deposit, which is a best combination and could be conducive to economic development in China.

The last factor that will influence China's economy next year is the banking system. Currently, China has made dramatic advancement in banking system reform. Marketization, commercialization or even the privatization of banking system has become the vital part in maintaining the overall growth of economic development.

(People's Daily November 23, 2005)