Washington, November 1:
The International Monetary Fund (IMF) has cast doubt on the success of Chinaâ€™s efforts to slow its booming economy, and a report by the 184-nation fund urges Beijing to revamp its currency policy to avoid a protectionist backlash.
As its economy soars, China has sought to rein in a boom in construction and bank lending that it worries could ignite inflation or a financial crisis. The government said in October that growth slowed in the July-September quarter in response to curbs imposed to avert overheating.
Steve Dunaway, deputy director of the IMFâ€™s Asia department, said today that he had â€œconsiderable doubts that theyâ€™re winning the battleâ€ to slow the economy. â€œTo some extent the Chinese are working against themselves with respect to financial reform.â€ American manufacturers have long complained that China is keeping the value of its currency artificially low, making Chinese goods cheaper in the United States and American products more expensive in China. That, they say, contributes to the loss of US factory jobs.
Chinese leaders have said they plan eventually to let their currency trade freely on world markets but to do so immediately would cause financial turmoil and damage the Chinese economy.
Dunaway said the past few months have seen a more rapid rate of appreciation for the Chinese currency than in the first part of the year. He urged the Chinese to do more. â€œWe think whatâ€™s needed is greater flexibility in the exchange rateâ€ and for Beijing to give â€œthe Peopleâ€™s Bank of China more discretion in setting both the interest rates and the exchange rates so that they have more latitude to operate with monetary policy,â€ he said.
The IMF report, a regular review of Chinaâ€™s economy, said that as the countryâ€™s export market share rises, â€œfrustration in many trading partner countries with Chinaâ€™s slow pace of exchange rate appreciation has been mounting. This runs the risk of exposing China to renewed protectionist measures.â€
The report stated a â€˜major riskâ€™ lies in the growing protectionist sentiments in Chinaâ€™s major markets, especially in the US and the EU. The IMF was established in 1945 to help promote the health of the world economy. The fund wor-ks to foster economic and financial stability, avert crises and help financially distressed countries.
BEIJING: Chinaâ€™s National Bureau of Statistics has said it wants to work with its Americ-an counterpart to find the true size of the Sino-US trade imbalance. The two countries require improvements in their statistical compilations to ascertain a figure that more accurately reflects their trade. So far, different statistical methods have led to widely diverg-ent figures for Chinaâ€™s trade su-rplus with the US. â€” AFP
Growth to top 10.5pc
WASHINGTON: The IMF on Tuesday notched up its 2006 economic growth forecast for China to over 10.5 per cent, while urging the country to rein in excess investment and reform its currency regime. â€œWe would estimate that gro-wth this year would probably be a little over 10.5 per cent,â€ the IMF mission chief for China, Steve Dunaway said. â€” AFP