Chinese Premier Wen Jiabao warns of double-dip recession
http://www.news.com.au/business/chin...-1225840647902
CHINA has sounded a warning that inflation, unemployment and sovereign debt could lead to a "double-dip" global recession.
And the economic powerhouse - Australia's biggest trading partner - says it will move to boost its imports in a bid to fix global economic "imbalances".
The comments from Chinese Premier Wen Jiabao came as he pushed back at pressure for a stronger Chinese currency, saying China was opposed to "countries pointing fingers at each other".
US President Barack Obama wants China to change its yuan policy to help re-balance the global economy.
Mr Wen called for more reforms to the world's financial system as China ponders policy choices aimed at fighting rising inflation while increasing domestic demand.
He said that surging commodity prices had been at the centre of disputes with Australia.
Nobel Prize-winning economist Paul Krugman has also weighed into the debate, saying global growth would be 1.5 percentage points higher if China stopped restraining its currency value and running trade surpluses.
But Mr Wen said he did not believe the yuan was undervalued and labelled US dollar volatility a big concern, saying he was worried about China's US currency holdings.
Stronger-than-expected inflation data last week fuelled concerns about China's economy overheating, with the nation's consumer price index surging 2.7 per cent in February.
But central bank governor Zhou Xiaochuan yesterday said this hadn't changed policy plans, and the bank's position on interest rates was based more on inflation outlook and changes in the overall economy than published data.
Mr Wen said interest rates must be kept at a reasonable level.
His caution on global recovery followed an upbeat speech by US Treasury Secretary Timothy Geithner at the weekend, in which he forecast the US would emerge from recession faster and stronger than the other major economies.
"The American economy is starting to come back," Mr Geithner said, despite acknowledging "major economic challenges" ahead.
"(The) economy is healing -- you are seeing gradual strengthening really across the board," he said.
Mr Geithner said the global economy was expected to grow 4 per cent this year and in 2011, and "those forecasts seem to be going up".
With Bloomberg.
http://www.news.com.au/business/chin...-1225840647902
CHINA has sounded a warning that inflation, unemployment and sovereign debt could lead to a "double-dip" global recession.
And the economic powerhouse - Australia's biggest trading partner - says it will move to boost its imports in a bid to fix global economic "imbalances".
The comments from Chinese Premier Wen Jiabao came as he pushed back at pressure for a stronger Chinese currency, saying China was opposed to "countries pointing fingers at each other".
US President Barack Obama wants China to change its yuan policy to help re-balance the global economy.
Mr Wen called for more reforms to the world's financial system as China ponders policy choices aimed at fighting rising inflation while increasing domestic demand.
He said that surging commodity prices had been at the centre of disputes with Australia.
Nobel Prize-winning economist Paul Krugman has also weighed into the debate, saying global growth would be 1.5 percentage points higher if China stopped restraining its currency value and running trade surpluses.
But Mr Wen said he did not believe the yuan was undervalued and labelled US dollar volatility a big concern, saying he was worried about China's US currency holdings.
Stronger-than-expected inflation data last week fuelled concerns about China's economy overheating, with the nation's consumer price index surging 2.7 per cent in February.
But central bank governor Zhou Xiaochuan yesterday said this hadn't changed policy plans, and the bank's position on interest rates was based more on inflation outlook and changes in the overall economy than published data.
Mr Wen said interest rates must be kept at a reasonable level.
His caution on global recovery followed an upbeat speech by US Treasury Secretary Timothy Geithner at the weekend, in which he forecast the US would emerge from recession faster and stronger than the other major economies.
"The American economy is starting to come back," Mr Geithner said, despite acknowledging "major economic challenges" ahead.
"(The) economy is healing -- you are seeing gradual strengthening really across the board," he said.
Mr Geithner said the global economy was expected to grow 4 per cent this year and in 2011, and "those forecasts seem to be going up".
With Bloomberg.