Official calls on world to reject protectionism

Updated: 2007-04-15 09:55

A senior Chinese finance official called on the world on Saturday to oppose the rising protectionism and promote progress in the Doha Round.

People's Bank of China Deputy Governor Hu Xiaolian, left, and IMF First Deputy Managing Director John Lipsky, right, attend the International Monetary and Financial Committee meeting, April 14, 2007, in Washington. [AP]

Hu Xiaolian, deputy governor of the People's Bank of China, said that all countries should make efforts to create a favorable globalization environment in which all countries may participate on an equal and beneficial footing.

"With trade protectionism pressures growing, measures taken by certain countries --under the pretext of righting global imbalances -- will hinder the trade liberalization process," Hu said at the spring meetings of the IMF and the World Bank.

"We call on all countries to harness the opportunities created by globalization, pursue timely structural readjustments, resolutely oppose protectionism, promote progress in the Doha Round," she said.

Hu, who attended the meetings on behalf of Zhou Xiaochuan, governor of China's central bank, also welcomed the IMF's efforts to strengthen surveillance in safeguarding global financial stability and promoting the economic prosperity of its members.

"We have noted the efforts to strengthen Fund surveillance since the Singapore Meetings, including through possible revision of the 1977 Decision on Surveillance over Exchange Rate Policies," she said.

"In this regard, we wish to emphasize that, first, revision of the Decision should not proceed too hastily," she said. "In making adequate and careful analysis, the Fund must take the opinions of all concerned parties into account and build broad consensus among all member countries to ensure that it would benefit them all."

Second, in strengthening surveillance, the Fund should be realistic, and not overestimate, the role of exchange rate, Hu said.

"Biased advice would damage the Fund's role in safeguarding global economic and financial stability," she said, while emphasizing that the focus of surveillance should be consistent with the purposes laid out in the Fund's Articles of Agreement.

"Due respect should be paid to the fundamental role of sustaining growth in promoting external stability. External stability can only contribute to overall sustained stability when anchored by domestic stability," she concluded.

Also Saturday, Hu Xiaolian said that China's economic growth model has undergone welcome changes and its economy will continue on path of steady and fast growth.

"The Chinese economy is projected to remain on a fast growth track -- exceeding 8 percent in real terms -- in 2007," she said, adding that the government will give more emphasis to the quality and sustainability of economic growth.

She also said the reform of the China's foreign exchange regulatory framework has steadily deepened. "The RMB exchange rate formation mechanism is being improved and flexibility of the RMB exchange rate has increased significantly," she said.

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