Dai Xianglong, governor of the People's Bank of China, told a business conference that the renminbi will benefit from China's consistent GDP growth and declining US interest rates, which have boosted the renminbi's exchange rate. Dai made the comments ahead of the Fortune Global Forum, which commenced Tuesday in Hong Kong.

The central bank governor said China will be able to shrug off the global economic slowdown with all of its major economic indicators likely to stay in healthy shape through 2001.

Bank calculations say the economy is expected to grow by 7 per cent, fixed assets investment by 10 per cent and trade volume by 8 per cent.

Foreign exchange reserves, which stood at US$176 billion at the end of March, are also expected to expand, he said.

Against a backdrop of a unfavourable economic growth prospects in the United States and Japan, economists have lowered forecast figures for most Asian economies, seen as heavily dependent on both the US and Japan.

But China was singled out as an exception as economists expressed faith in the ability of the country's vast domestic demand to offset shrinking external demand.

Dai said the country will stick to its policy of treating domestic demand as the prime driving force behind the economy even after the country becomes a member of the World Trade Organization (WTO).

China's role in the globalizing economy has become a hot topic in economic and business circles. One of key points in these discussions is China's reliance on exports.

"As a big developing country, reliance on the domestic market should be our fundamental policy. It is impossible that we should depend solely on exports," Dai said.

He also said growth of the Chinese economy and China's entry into the WTO would mean more business opportunities for the whole of Asia instead of the increase in competition between China and Southeast Asian countries predicted by some analysts.

"China's exports to the US are mainly light industrial products while Southeast Asian exporters sell the US mostly integrated circuits," he said.

Last year, 63 per cent of China's imports came from Asian economies. The country is expected to import US$1.4 trillion worth of equipment and technology in the next five years, which will translate into great opportunities for Asian economies, Dai said.

Dai also expressed his optimism over prospect for East Asian economies.

Despite impact from the slowing US economy, Asian economies are strong enough to avoid a repeat of the 1997 Asian financial crisis, he said.

Dai said Asian economies have taken pragmatic measures to adjust the structures of, and rectify the weaknesses in, their financial institutions. These reforms have facilitated recovery of the economies and lead to stable performance of their financial systems, he said.

"We believe there is no possibility that a financial crisis of a comparable nature to that in 1997 will happen in the near future," he said.

(China Daily 05/09/2001)