The head of the International Monetary Fund has warned that the outlook for the global economy remains uncertain following meetings in China with the country's communist party leadership.
Christine Lagarde congratulated Beijing for its stewardship of the world's second largest economy and said "China remains a bright spot" in the global growth league.
But she warned the situation could still deteriorate if the world's major powers failed to react with policies to stimulate growth and spread prosperity among all their citizens.
"While the global economic outlook is certainly less gloomy than when I was here last November, there are still major economic and financial vulnerabilities we must confront. There is not a great deal of room for manoeuvre and no room for policy mistakes," she said.
Her warning comes amid a slowdown in global growth while oil prices continue to climb. Some economists said the rising price of oil was an increasing threat to growth after Brent crude hit $126 a barrel last week.
Lagarde said Chinese officials needed to move more quickly "away from investment and exports, and towards domestic consumption".
She said: "I am encouraged that the Chinese authorities are focusing, not just on the level of growth, but on growth that is more widely shared across the entire population, as underscored by the policy agenda in the recent 12th five-year plan.
The deputy managing director of the IMF, Zhu Min, said later at a conference in Hong Kong that the global economy had stepped back from the brink and signs of stabilisation were emerging.
"Number one, the global growth rate is slowing down. Number two, things are getting better. Number three, the risks are still on the downside," he said.
Zhu, a former deputy governor of the Chinese central bank, said China's exchange rate must move into a more flexible regime, echoing similar comments by Chinese vice premier, Li Keqiang, also speaking at the weekend, who said the world's second-largest economy could not delay tough economic reforms and promised flexible policies to keep growth brisk and prices stable.
Zhu was appointed to the newly created deputy managing director post at the IMF in July, in a move aimed at recognising China's growing clout in the global economy.
The IMF has warned that China's annual economic growth could almost halve this year if Europe's debt crisis tips the world economy into a recession.
Zhu said economic trends and policy in China were pointing to a soft landing for China's economy, which has been one of the few drivers of global growth in recent years.
"In Europe, the financial markets are still very fragile," Zhu said. "There is no room for any mistake, any slip-up in the market."
guardian.co.uk
Christine Lagarde congratulated Beijing for its stewardship of the world's second largest economy and said "China remains a bright spot" in the global growth league.
But she warned the situation could still deteriorate if the world's major powers failed to react with policies to stimulate growth and spread prosperity among all their citizens.
"While the global economic outlook is certainly less gloomy than when I was here last November, there are still major economic and financial vulnerabilities we must confront. There is not a great deal of room for manoeuvre and no room for policy mistakes," she said.
Her warning comes amid a slowdown in global growth while oil prices continue to climb. Some economists said the rising price of oil was an increasing threat to growth after Brent crude hit $126 a barrel last week.
Lagarde said Chinese officials needed to move more quickly "away from investment and exports, and towards domestic consumption".
She said: "I am encouraged that the Chinese authorities are focusing, not just on the level of growth, but on growth that is more widely shared across the entire population, as underscored by the policy agenda in the recent 12th five-year plan.
The deputy managing director of the IMF, Zhu Min, said later at a conference in Hong Kong that the global economy had stepped back from the brink and signs of stabilisation were emerging.
"Number one, the global growth rate is slowing down. Number two, things are getting better. Number three, the risks are still on the downside," he said.
Zhu, a former deputy governor of the Chinese central bank, said China's exchange rate must move into a more flexible regime, echoing similar comments by Chinese vice premier, Li Keqiang, also speaking at the weekend, who said the world's second-largest economy could not delay tough economic reforms and promised flexible policies to keep growth brisk and prices stable.
Zhu was appointed to the newly created deputy managing director post at the IMF in July, in a move aimed at recognising China's growing clout in the global economy.
The IMF has warned that China's annual economic growth could almost halve this year if Europe's debt crisis tips the world economy into a recession.
Zhu said economic trends and policy in China were pointing to a soft landing for China's economy, which has been one of the few drivers of global growth in recent years.
"In Europe, the financial markets are still very fragile," Zhu said. "There is no room for any mistake, any slip-up in the market."
guardian.co.uk
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