Appropriate measures taken by the Chinese government have helped to curb rapid decline in economic growth, and the country is expected to serve as a stabilizing force in global economy, People's Bank of China Governor Zhou Xiaochuan said.
In an article published on the central bank's Web site, Zhou said, China is expected to maintain stable economic growth by boosting domestic demand and reducing dependence on external demand. It would then serve as a stabilizing force in global economy.
Zhou said macroeconomic measures have produced preliminary result and some leading indicators are pointing to recovery of economic growth.
The Chinese government has announced a plan to invest an extra 4 trillion RMB over two years. The central bank has supported the economy by lowering interest rates.
China's export sector was hit worse by global economic slowdown. Exports plummeted by a record 25.7% in February from the previous year, marking the fourth straight month of decline.
The head of the Organisation for Economic Co-operation and Development, Angel Gurria had warned that China's economic growth would slow to 6%-7% in 2009. On March 18, the World Bank had lowered China's growth forecast to 6.5% from 7.5% initially projected.
Further, Zhou said the banking reform made in 2003 and the securities industry cleanup have proved to be successful and have laid a solid foundation for China's financial sector to withstand the current economic downturn.
He said it is worth to note that China's financial system has been helped by the progressive opening-up strategy and its limited exposure to overseas markets. We should bear in mind that despite the notable achievements in banking reform, the major banks have not gone through a full business cycle and still have much to improve. An economic slowdown will be the ultimate stress test for the robustness of the banks' strengths, Zhou said.
On Monday, Zhou had repeated his call for a new global reserve currency managed by the International Monetary Fund.
Pointing out the dangers of relying on the one national currency without explicitly mentioning the dollar, Zhou had insisted that an international reserve currency disconnected from individual nations would be able to remain stable in the long run.
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