Stephen Roach: China to play vital role in rebounding world economy
www.chinaview.cn 2004-03-21 22:31:45
BEIJING, March 21 (Xinhuanet) -- Stephen Roach, chief economist of US-based leading investment bank Morgan Stanley, said that China's economy has integrated into the world economy and China's economic development would play a vital role in reviving the world economy.
Roach made the remark when addressing the 2004 China Development Forum being held from March 20 to 22.
He said China was currently on a successful path of promoting economic growth and would be a more and more important player for balancing world economic development.
"I think China is extraordinarily successful on the way toward prosperous development, which means China's economy is on the world stage now," Roach said.
The economist also pointed out that China's maintaining of the stability of its currency RMB was a "reasonable choice" because the currency's stability was among the top priorities for securing the sustainable economic development.
"In fact China's overall trade is slightly in surplus and the RMB is not undervalued as many westerners suggest," Roach added.
Roach warned that there could be some collective weakening for countries and regions that highly rely on exporting to China if China's economic development slows down.
One of the important ones could be the Japanese economy, which many are convinced is recovering, and of course, Taiwan, the Republic of Korea, and even the US benefit a lot from selling exports to China, Roach stressed.
Roach also warned that China now is facing potential risks of economic overheating, but the monetary policies issued by China's central bank, the People's Bank of China (PBOC), have had some effect.
"The good news is that China is resolving risks brought about by the economic overheating which became evident last year, and I think the medicine, at least so far, has begun to work," Roach said.
A PBOC report issued last month said that in January financial institutions extended 262.9 billion yuan (about 31.7 billion US dollars) in new RMB loans, 65.6 billion yuan less on a yearly basis.
By the end of last month all the institutions' outstanding combined loans -- in both Chinese and foreign currencies -- stood at 17.27 trillion yuan (2.08 trillion dollars), a rise of 20.6 percent from a year ago, but slowed from the end of 2003. Enditem
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