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WB: China's development key to world recovery

(Xinhua)
Updated: 2009-03-21 08:21

Many economists believe the world economy will see a turning point in late 2009, but Adams said he was on the more cautious side. "You probably won't see return of growth rate until next year," he said.

File photo shows workers producing handsets at a hi-tech factory in Shenzhen, in southern China's Guangdong province. [Agencies]

According to Adams, if China is able to go back to an 8-percent growth rate, that would be an important news for the world economic recovery, but equally important is the rebound of economy of the United States.

"When the US economy, which is in recession now, begins to develop positively, that will boost the world economy as well," said the World Bank leader.

He said China also plays an important role in the upcoming G20 (Group of 20) summit in London.

"China has emerged as a very strong, important force in the global dialogue on key global economic and political issues today, " said Adams.

Protectionism Not A Way to Tackle Crisis

Adams also spoke strongly against the rising trend of protectionism. He cited a recent World Bank report as saying that since G20 leaders signed a pledge in November 2008 to avoid protectionist measures, quite a few countries, including 17 from the G20, have implemented 47 measures that restrict trade at the expense of other countries.

Moreover, since the beginning of the financial crisis, officials have proposed and/or implemented roughly 78 trade measures, according to the World Bank's monitoring list of trade and trade-related measures.

Of these, 66 involved trade restrictions, and 47 trade-restricting measures eventually took effect. The effects of these measures are likely minor relative to the size of unaffected markets but they have a significant negative effect on particular exporters who are shut out of markets, Adams warned.

"Leaders must not heed the siren-song of protectionist fixes, whether for trade, stimulus packages or bailouts," World Bank President Robert Zoellick has said.

Noting that protectionism is widely viewed as having deepened and prolonged the Great Depression, the World Bank chief added that "economic isolationism can lead to a negative spiral of events such as those we saw in the 1930s, which made a bad situation much, much worse."

Zoellick's remarks were echoed by Adams. He acknowledged that every country is going to face pressure of protectionism but "what 's important for finance ministries, or trade ministries is to do everything they can to keep the country open to the international trade environment."

He said protectionism is not the way to tackle the current economic crisis, adding that resisting protectionist measures will not only benefit individual countries, but also the global economy as a whole.

"We don't need trade restrictions, comparative devaluation," he said. "What we need is an overall reassessment of world economy so that it can go back to normal trade growth and GDP growth."

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