China helping to steady world economy says World Bank

China is taking decisive action to help stabilise the world economy, says World Bank Group president Robert Zoellick, who made an official visit to the country. According to Zoellick, China is persisting with efforts to re-balance its economy towards greater domestic demand.

“China has steered a steady course through the stormy seas of the economic crisis,” Zoellick said during his third official visit to China as World Bank Group president in the first week of September. “Through its massive stimulus and strong lending programme, China has contributed to the early signs of a global recovery by keeping its growth rate up. With growth in China now projected at close to 8% for 2009 as a whole, and signs of stabilisation in many other economies in Asia and around the world, the chances of a truly global recovery have increased measurably.”

Zoellick said he was especially impressed by the fact that the recent rebound in the Chinese economy had come almost entirely from domestic demand. This had led to a welcome pick-up in imports, especially in raw materials from within and outside the Asia Pacific region as well as in machinery and equipment.

“China’s trading partners are benefiting from this domestic demand and that is helping to strengthen levels of confidence across the world,” he said. “The challenge for China now is to deepen the domestic consumption trend through even stronger government investment in health and education, financial sector reform, liberalising services further, and strengthening the integration of migrants in China's cities.”

A key aspect of China’s stimulus is the extent of its investment in energy efficiency and low-carbon alternatives to road and air transport. “Through its stimulus package, China is spending US$90bn on new rail projects this year, with a similar amount planned for next year,” Zoellick said. “China will spend US$85bn on energy conservation and environmental measures in 2009-10. These are wins for the people of China as well as for the global environment.”

Zoellick discussed emerging signs of global recovery and the Chinese economy with Premier Wen Jiabao.