IMF chief Rodrigo Rato said on Oct.15 in Xianghe, Hebei province, China that China's currency reform launched in July this year was a step "in the right direction". He viewed a more flexible exchange rate system in the interest of China because it improves the independence of the currency policy and helps guard against financial risks.

Mr. Rato praised China's economic achievements, regarding the country's economic success crucial to the vigor of the global economy as a whole. He believed that China's next five-year plan announced last week making commitments on prudential macro-economic policy, structural reform especially reform on finance and labor market would bring higher living standard and more reasonable income distribution to the Chinese people.

The IMF managing director made optimistic expectation for the global economy at 4.3 percent growth rate for 2005 and 2006. But he also warned against unstable factors threatening the world economy, including the high oil price and the global economic imbalance.

He urged oil producing countries around the world to invest on production capacities and oil consumers to improve their oil refining ability and use energy more efficiently.

He also called on the G20 to take measures to abandon trade protectionism and erase the imbalance on the world economic development.

By People's Daily Online