Developed Countries Urged to Take Measures to Stabilize World Economy

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Last updated at: (Beijing Time) Saturday, September 28, 2002

Developed Countries Urged to Take Measures to Stabilize World Economy

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The developed countries should continue to pursue accommodative macroeconomic policies and consider adopting further expansionary policies to reverse slow growth of economy, said Li Ruogu, assistant governor of the People's Bank of China, at the 68th meeting of Group 24 on Friday.

Meanwhile, they are expected to strengthen corporate governance,accounting and auditing practices with a view to restoring investor confidence while tightening supervision of the major financial centers in readiness for action in unexpected circumstances, said Li.

Although the current account imbalances among the major economies should be addressed, the adjustment should be gradual toavoid sharp volatility in capital flows and exchange rates, said Li.

On the other hand, the international community should work stepby step to eliminate development imbalances resulting from economic and financial globalization, through increasing official development assistance and technology transfers to developing countries, thus contributing to their economic well being, narrowing the North-South gap, and achieving a world-wide balanceddevelopment so that all countries benefit from economic globalization, said Li.

On the role of the IMF at the meeting, Li said that the Fund plays a critically important role in maintaining international monetary and financial stability.

In recent years, the Fund has made further progress in strengthening surveillance and crisis prevention and resolution, said Li.

Li said that under the current circumstances, the Fund should strengthen its surveillance of the major industrial countries and international financial centers aimed at preventing excessive volatility among major currencies and the effective monitoring of international capital movements to ensure the sound and efficient operation of international financial markets and the sound development of the world economy.

As to the poverty reduction issue, Li said that the Fund and the Bank should intensify their poverty reduction efforts and further streamline their work procedures.

While providing financial and technical assistance, they shouldbe fully aware of the constraints facing poor countries in terms of infrastructure and capacity building, and avoid imposing unrealistic requirements, said Li.

The international community, including the Fund and the Bank, should draw up plans to implement vigorously the initiatives of the Monterrey Consensus and the World Summit on Sustainable Development in order to meet the Millennium Development Goals, said Li.

" We urge the developed countries to further open up their markets to the developing countries and attain the ODA target of 0.7 percent of GNP as soon as possible," Li said.

"To achieve the Millennium Development Goals, we underline the importance of country ownership and emphasize that development must be the priority," he said.

He said the Chinese government is against all kinds of terrorism and firmly supports and implements the resolutions of the U.N. Security Council in combating the financing of terrorism.

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