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PR Newswire
17-04-2014, 12:12 AM
Those contributors to this forum who has been spreading the message of doom regarding the Chinese economy (some with racist undertones) are probably assuming that the Chinese govt are inept. I hope you realize that Chinese govt actually recognize the problem and are trying to fix things.
WASHINGTON — A senior Chinese official hit back at the International Monetary Fund (IMF) warnings that China’s economy faced the danger of a hard landing due to poor asset quality, saying the government was taking action to deal with financial risk.
Chinese Vice-Finance Minister Zhu Guangyao said China worked closely with the IMF but did not agree with all of its analysis.
“In general, we think they are a very professional financial institution, but some of the methodology used and some traditional thinking ... they also need reform,” he told journalists on the sidelines of the IMF and World Bank meetings in Washington on Saturday.
“We hope that their analysis and methodology can really reflect a country’s reality,” he said. “We said not just to the IMF, but also to the World Bank, that not one size fits all. If your policy suggestion is (to be) a valuable suggestion, you must base it on reality.”
IMF Managing Director Christine Lagarde had warned of the risk of what she termed a “hard landing” in China, the world’s second largest economy, and negative repercussions on other emerging markets in her Global Policy Agenda released on Thursday.
While her report said the risk was small, it urged China to rein in risks in its shadow banking system and liberalise its financial sector to improve the allocation of credit.
Mr Zhu said Chinese President Xi Jinping had publicly recognised that China faced a challenge over the issue of shadow banks. “We are beginning to take action, including strengthening management, monitoring and supervision,” he said, adding that he believed China had handled the situation well, having drawn lessons from the 2008 collapse of Lehman Brothers.
“Compared with how the United States and the Europeans handled Lehman Brothers and the sovereign debt issue, we think that China is the most successful — so far,” he said.
Mr Zhu said state-owned investment companies known as local-government financing vehicles were already nationally audited to clarify what was government debt and what was government-guaranteed debt.
“The picture is very clear,” he said. “Now we are facing the challenge, strengthening the management on the local government financing vehicle issue.”
He echoed other policymakers in describing a recent decline in the yuan against the dollar as a result of market forces and said it was not a one-way phenomenon. “We hope that with the change of supply and demand, the yuan exchange rate can fluctuate up or down,” he said.
The weakening of the yuan prompted worries in Washington that China’s resolve to let market forces guide its currency was weakening.
In her report, Ms Lagarde offered a different view. “I took the recent increase of the band of the yuan as the move in the direction of internationalisation. I won’t characterise it as an intended depreciation of the currency,” she said.
Overall, Ms Lagarde’s report urged countries to do more to boost growth.
Beijing’s economy has been slowing, but it has been at pains to play down speculation that it might launch a large stimulus package, saying instead it would fine-tune policies to ensure unemployment did not rise. Reuters
WASHINGTON — A senior Chinese official hit back at the International Monetary Fund (IMF) warnings that China’s economy faced the danger of a hard landing due to poor asset quality, saying the government was taking action to deal with financial risk.
Chinese Vice-Finance Minister Zhu Guangyao said China worked closely with the IMF but did not agree with all of its analysis.
“In general, we think they are a very professional financial institution, but some of the methodology used and some traditional thinking ... they also need reform,” he told journalists on the sidelines of the IMF and World Bank meetings in Washington on Saturday.
“We hope that their analysis and methodology can really reflect a country’s reality,” he said. “We said not just to the IMF, but also to the World Bank, that not one size fits all. If your policy suggestion is (to be) a valuable suggestion, you must base it on reality.”
IMF Managing Director Christine Lagarde had warned of the risk of what she termed a “hard landing” in China, the world’s second largest economy, and negative repercussions on other emerging markets in her Global Policy Agenda released on Thursday.
While her report said the risk was small, it urged China to rein in risks in its shadow banking system and liberalise its financial sector to improve the allocation of credit.
Mr Zhu said Chinese President Xi Jinping had publicly recognised that China faced a challenge over the issue of shadow banks. “We are beginning to take action, including strengthening management, monitoring and supervision,” he said, adding that he believed China had handled the situation well, having drawn lessons from the 2008 collapse of Lehman Brothers.
“Compared with how the United States and the Europeans handled Lehman Brothers and the sovereign debt issue, we think that China is the most successful — so far,” he said.
Mr Zhu said state-owned investment companies known as local-government financing vehicles were already nationally audited to clarify what was government debt and what was government-guaranteed debt.
“The picture is very clear,” he said. “Now we are facing the challenge, strengthening the management on the local government financing vehicle issue.”
He echoed other policymakers in describing a recent decline in the yuan against the dollar as a result of market forces and said it was not a one-way phenomenon. “We hope that with the change of supply and demand, the yuan exchange rate can fluctuate up or down,” he said.
The weakening of the yuan prompted worries in Washington that China’s resolve to let market forces guide its currency was weakening.
In her report, Ms Lagarde offered a different view. “I took the recent increase of the band of the yuan as the move in the direction of internationalisation. I won’t characterise it as an intended depreciation of the currency,” she said.
Overall, Ms Lagarde’s report urged countries to do more to boost growth.
Beijing’s economy has been slowing, but it has been at pains to play down speculation that it might launch a large stimulus package, saying instead it would fine-tune policies to ensure unemployment did not rise. Reuters
