China’s Views on the Current World Economic Situation

Currently, the world economy is at the stage of slow recovery and still faced with numerous uncertain factors. Early this year, the United States economy witnessed a strong recovery, but suffered a setback in the second quarter. The recovery of the European economy remains weary and both consumption and investment are stagnant. Though the Japanese economy has shown some signs of improvement, its structural contradictions stand salient. The economies of East Asia (Japan not included), Southeast Asia, India and Russia have maintained a relatively good development momentum, becoming bright spots in the world economy.

This year relatively big fluctuations have cropped up on international financial markets. The U.S. and European stock markets suffered steep falls. The exchange rate of the dollar to the euro or yen once slid down sharply. Following the Argentine financial crisis, upheavals appeared on the financial markets of Latin American countries like Brazil and Paraguay, constituting a serious drag on their economic development.

With trade protectionism of the developed countries on the rise, the prospect of the new round of the WTO negotiations is unclear. This has an impact on the sound development of the multilateral trade system. Moreover, the turbulent Middle East situation, a possible U.S. military action on Iraq and the steep rise in oil prices are all potential threats to world economic development.

We believe that the developed countries should shoulder the responsibility to push forward world economic development, eliminate trade barriers, increase development aid, help relevant countries shake off the troubling financial crisis and enhance cooperation with developing countries to jointly facilitate sustained recovery and development of the world economy.