China Must Rebalance Economy: World Bank Chief
The head of the World Bank says China needs to shift its economy away from being export-driven. From AFP:
Robert Zoellick said the world’s second-largest economy would have to focus more on domestic demand, and warned that the coming months would be a “sensitive time” for many of the major developed economies.
“It’s hard for me to see that a continued reliance on export-led and investment-led growth will work for China over the next 10 years,” he told journalists at the end of a five-day official visit to China.
“And that challenge will even become clearer if the major developed countries have a hard time resuming their growth. So China needs to rebalance its economy, rely on more domestic demand, and increase consumption.”
The World Bank in July reclassified China as an upper middle income economy, putting it in a group of nations that he said needed to move on from the growth models they relied on while they were poor.
Zoellick said inflation remained the biggest short-term challenge for China’s leaders, but that moves to rein in rising prices appeared to be working.