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World Bank chief warns of economic 'danger zone'
Zoellick says world economy is entering a new danger zone
BEIJING — World Bank chief Robert Zoellick warned Saturday that the
global economy was heading into a new "danger zone", as he urged
China to speed up structural reforms to help its development.
"The financial crisis in Europe has become a sovereign debt crisis, with
serious implications for the monetary union, banks, and competitiveness
of some countries," he said at a conference in Beijing on the future of China.
"The United States must address the issues of debt, spending, tax reform
to boost private sector growth and a stalled trade policy," he added, warning
starkly: "The world economy is entering a new danger zone this autumn."
The World Bank chief also urged Beijing to accelerate its structural reforms as
it seeks to develop from an export-driven economy towards a growth model
more reliant on domestic consumption.
"China's structural challenges occur in a current international context of slowing
growth and weakening confidence," he warned, adding that China would face
further challenges in the years ahead.
"In the next 15 to 20 years, China is well-positioned to join the ranks of the
world's high income countries," he said, warning: "That's a transition that
only a handful of countries have made -- and, sadly, many have failed".
The World Bank in July reclassified China as and upper middle income economy,
putting it in a group of nations that he said needed to move on from the
growth models they relied on while they were poor.
"They can be squeezed on both ends: by competition from low-income,
low-wage economies, as well as by competition from upper-income countries
through innovation and technological change," he said.
He urged Beijing to address the issue, saying "China's policymakers know
what needs to be done". Beijing routinely comes under pressure from Europe
and the United States to revalue its currency, which they say is kept artificially
weak to favour Chinese exports, and to allow more access to the world's
number two economy.
China's monetary policy and intellectual property rights have also been at the
root of persistent frictions between the trading partners.
"Decisions in Europe, decisions in the United States, decisions in China --
they affect us all," added Zoellick, who is in China until Monday.
Zoellick says world economy is entering a new danger zone
BEIJING — World Bank chief Robert Zoellick warned Saturday that the
global economy was heading into a new "danger zone", as he urged
China to speed up structural reforms to help its development.
"The financial crisis in Europe has become a sovereign debt crisis, with
serious implications for the monetary union, banks, and competitiveness
of some countries," he said at a conference in Beijing on the future of China.
"The United States must address the issues of debt, spending, tax reform
to boost private sector growth and a stalled trade policy," he added, warning
starkly: "The world economy is entering a new danger zone this autumn."
The World Bank chief also urged Beijing to accelerate its structural reforms as
it seeks to develop from an export-driven economy towards a growth model
more reliant on domestic consumption.
"China's structural challenges occur in a current international context of slowing
growth and weakening confidence," he warned, adding that China would face
further challenges in the years ahead.
"In the next 15 to 20 years, China is well-positioned to join the ranks of the
world's high income countries," he said, warning: "That's a transition that
only a handful of countries have made -- and, sadly, many have failed".
The World Bank in July reclassified China as and upper middle income economy,
putting it in a group of nations that he said needed to move on from the
growth models they relied on while they were poor.
"They can be squeezed on both ends: by competition from low-income,
low-wage economies, as well as by competition from upper-income countries
through innovation and technological change," he said.
He urged Beijing to address the issue, saying "China's policymakers know
what needs to be done". Beijing routinely comes under pressure from Europe
and the United States to revalue its currency, which they say is kept artificially
weak to favour Chinese exports, and to allow more access to the world's
number two economy.
China's monetary policy and intellectual property rights have also been at the
root of persistent frictions between the trading partners.
"Decisions in Europe, decisions in the United States, decisions in China --
they affect us all," added Zoellick, who is in China until Monday.
