China faces mild fallout from global slowdown

Updated: 2007-11-22 09:16

JOHANNESBURG - Zhou Xiaochuan, China's central bank chief, said Wednesday the world economic growth may experience a slowdown next year, but it is likely to have only mild effect on China's growth.

"The sub-prime crisis in the United States has dampened US consumers' spending, and has likely affected some European consumers as well," Zhou, governor of the People's Bank of China said.

China's export to the United States is likely to suffer mildly because of such scale-back in consumer spending, but that can somewhat sort out the imbalances in bilateral trade, and is likely to have only mild effect on China's economic growth, said Zhou.

The central bank chief said developments in the next two months are to be closely watched, as US consumers enter their annual spending frenzy before Christmas. The United States also imports huge volume of goods during this time of the year.

Zhou recommended export-oriented companies in China to explore other markets rather than focusing only on the US market, in order to minimize the effect of a possible slowdown in exports to the United States.

The central bank chief has just attended a two-day G20 meeting focusing on global financial stability. He said most participants agreed that the world economy is experiencing a slowdown in the aftermath of US sub-prime crisis, but the slowdown trend is unlikely to be prominent, and next year's economic outlook is still promising.

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