China's economy has been developing in a rapid, smooth and sustainable way, but is likely to face greater inflation pressure in the future, said Zhou Xiaochuan, governor of the People's Bank of China.

Addressing the 14th International Monetary Fund Committee meeting held Sunday in Singapore, Zhou said that the global economy is exposed to downside risks since major economies resort to tight monetary policies when expanding economy, some countries show a slowdown economic growth, and the prices of oil and raw materials fluctuate at a high level.

Meanwhile, there are rising voices for trade protectionism with trade friction extending from commodity trade area to service trade and investment areas, which have a bad impact on the fair and mutually beneficial international economic environment, said Zhou.

He noted that China's policy of expanding domestic consumption began to take effect. And the Chinese currency exchange rate mechanism is much more flexible with market forces playing a bigger role.

Zhou said China is still faced with problems of unreasonable economic structure, environmental pollution, employment pressure and challenging tasks of building corporate governance in the financial sector.

He called for strengthening consultation and dialogue mechanisms between nations to achieve energy security and ward off global financial crisis.

Zhou said the IMF should enhance the supervision of macro economic policies of the world's major currency nations to prevent major currencies from fluctuating too violently and urge those nations to well manage their hedge funds.

Source: Xinhua