WB: China plays crucial role in global economic recovery
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With its high growth rate and expanding investments in the world, China is playing a crucial role in the global economic recovery, a leading World Bank expert said Friday.
Hans Timmer, director of the World Bank's Development Prospects Group, made the comment as he spoke to Xinhua in an interview on the sidelines of the Spring Meetings of the International Monetary Fund (IMF) and the World Bank in Washington D.C.
"China has played a very important role" in the global economic recovery, Timmer said. "If you look at gross industrial production, or growth rates, you will see that not only China is growing at a higher rate, but China is actually leading the recovery."
In doing so, China has become very important in terms of making investments in the world, and investments from China has been a crucial element in the global economy, both in the downturn as well as in the upturn, he said.
"The unprecedented contraction of production and trade was not because of a fall of the domestic demand in the United States," he explained. "It was because of a rapid contraction in investments across the world and most of the investments are down in the developing world."
"Now also in the recovery, it is the investments that have to bring the global economy in a sustained recovery again, and there China is very important," he said.
With regarding to consumption, the US economy is seven times as large as China, but in terms of investments, the US economy is only three times as large as China, he elaborated. "But then if you look at the contribution to global investment growth, under normal times, China is already one and a half times as important as the United States."
"So, in that very crucial mechanism that was responsible for the downturn and responsible for the recovery, already now China is more important than the United States."
Timmer cited China's "very successful" policies for its ability to come out of the crisis in a better shape than many other countries.
"China is growing fast now, not because it was not hit by the crisis," he said.
In fact, China was very hard hit by the crisis, especially in the fourth quarter of 2008. But the government has responded with policies that had helped revive the economy, he noted.
The Development Prospects Group is responsible for the global macro-economic forecasts of the World Bank and focuses on cross- border flows to developing countries, from trade and financial flows to remittances and migration.
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