China growth vital to world recovery: ADB

(Xinhua)
Updated: 2009-03-09 20:46

MANILA -- Asian developing economies are among the worst-hit in the unfolding world financial crisis and China can play a key role in the world's recovery by maintaining relatively high growth, head of the Asian Development Bank said Monday.

"The most important contribution China can make to the world economy is to sustain its high growth. The government has announced a sweeping stimulus package, which I think will certainly work," ADB President Haruhiko Kuroda said at a press conference held here at the sideline of a two-day forum on the local impact of the global crisis.

Kuroda said while it is impossible for China to yield double- digit annual GDP (gross domestic products) growth like before, the 8 percent growth target unveiled by Beijing recently is still remarkable, and quite high among the world economies, amid the crisis.

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China's economy cooled to its slowest pace in seven years in 2008, expanding 9 percent year-on-year as the widening financial crisis battered the fastest-growing economy which posted double- digit growth since 2003.

In response, China has announced a 4-trillion-yuan stimulus package and planned huge government investment, tax reform, industrial restructuring, scientific innovation, social welfare and employment-generating programs.

Kuroda said the Chinese government addressed to the crisis promptly and is making the best efforts to help bring the world economy back on track.

According to the latest study of the Philippines-based ADB, the global crisis slashed value of financial assets worldwide by $50 trillion in 2008, with developing Asia suffering the worst among emerging market regions with a financial assets loss of $9.6 trillion last year.

Kuroda said things would "get worse" before they get better and an early recovery will only take shape in at the end of this year.

Besides efforts to sustain its own growth, Kuroda said China can play bigger role in maintaining the smooth run of the global economic mechanism amid the crisis by properly using its massive foreign exchange reserves valued at $1.95 trillion, by far the world's largest.

Kuroda also urged China to increase its assistance aids to other parts of the developing world, especially the impoverished countries in the region.