BEIJING, December 15, 2008 – World Bank President Robert B. Zoellick said today that despite its recent slowing growth, the Chinese economy continues to play a key stabilizing role as other economies around the world come to terms with the effects of a global recession.
"The most important thing that China can do for global stability at this point is to keep its own economy growing well," Mr. Zoellick told a gathering of national and international media during his second visit to China as World Bank President. " That won't be easy given the downturn in international trade that China is already experiencing. This is why the Government's welcome efforts to stimulate the domestic economy will be so important in the months ahead."
Mr. Zoellick said recent reductions in food and commodity prices would provide welcome relief to millions of people on or below the poverty line while also cutting the risk of inflation. " This should also help to boost prospects for the domestic economy," he said.
Mr. Zoellick discussed the financial crisis and its impacts on China's economy with leaders of the Chinese Government today. "On the 30th anniversary of its economic reforms, China plays a critical role in the global economy. China’s efforts to boost domestic demand are good for the global economy. They can also help China achieve its own economic rebalancing goal," Mr. Zoellick said.
At the meetings, Mr. Zoellick also commended the Chinese leaders for China's remarkable rescue and relief effort following the earthquake which devastated areas of Sichuan, Gansu and Shaanxi in May. Before meeting with state leaders in Beijing, Mr. Zoellick visited the town of Beichuan in Sichuan province where he met with provincial officials and laid a wreath in remembrance of the more than 68,000 people who died and 18,000 who are still missing as a result of the earthquake and after shocks.
In Beichuan, Mr. Zoellick was able to see the early results of an approach to recovery that China has developed in which reconstruction in the 18 most extremely affected counties in Sichuan is being financed by domestic sources from "provincial twinning partners". Shandong Province is designated as the partner for Beichuan County.
The World Bank is finalizing a $710 million loan – expected to be considered by the World Bank Board for its approval next month – to support China's 1 trillion RMB reconstruction effort in areas severely-affected by the earthquake. The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has already signed an agreement to provide equity support for increased loans to small and medium enterprises (SMEs) affected by the earthquake.
"The Government's massive recovery and reconstruction efforts to aid communities in the wake of the devastating Wenchuan earthquake are extremely impressive," Mr. Zoellick said. " We are pleased to be able to contribute our global experience and knowledge of disaster recovery while helping other countries to learn new and effective approaches from China."
In Beijing today, Mr. Zoellick has met with Executive Premier Li Keqiang, Vice Premier Wang Qishan, Minister of Finance Xie Xuren, Minister of Foreign Affairs Yang Jiechi, and Minister of Commerce Chen Deming. Before his departure, he will meet Premier Wen Jiabao, Governor Zhou Xiaochuan of the People's Bank of China, Vice Chairman of the National Development and Reform Commission Zhang Xiaoqiang, and President of the Export-Import Bank of China Li Ruogu to discuss ongoing cooperation and knowledge sharing between the two agencies. While in Sichuan on the weekend, Mr. Zoellick met Provincial Party Secretary Liu Qibao and other provincial officials to discuss the expected World Bank loan to assist the recovery program.