The exact same day the International Monetary Fund (IMF) released its economic outlook, predicting that world growth would fall to 0.5 percent in 2009, its neighbour in Washington DC, the World Bank, expressed more confidence in the future. In IMF projections China faces an important slowdown but it still drives world growth with a 6.7percent pace in 2009, albeit down from 9.0 percent in 2008.
Justin Lin, World Bank's chief economist and vice president, doesn’t deny that China’s economy is slowing down, badly hit by the global crisis. And that growth in the Middle Empire is at the top of the agenda of the 39th edition of the World Economic Forum in Davos.
Lin, the organization's first Chinese top economist, focuses on two themes: China’s economy and the global crisis. He acknowledges that the current crisis has a big impact on China's economy. The main symptoms are various: a shrinking consumption, overcapacity of production in some sectors and difficult business conditions for enterprises. What is new is the rising unemployment in urban areas.
The question on everybody’s mind here at Davos is when will China's economy begin to grow fast and steadily again. All business leaders here in Davos are potential investors in China and many of them are anxious about the situation.
But the Chinese seem to be full of confidence - because the fundamentals of China's economy remain unchanged, they say.
Lin says that the best way to tackle the crisis is true international cooperation. He assumes that the financial crisis is a “test” of the readiness of the international community to promote cooperation and mutual assistance.
The chief economist concludes by saying that developing countries need to have greater say and representation in international financial institutions.