China central banker warns global economic risks increasing
The global economy faces risks from both slowed growth and persistent inflationary pressure, which is spilling over from emerging to advanced economies, Ma Delun, a vice-governor at China's central bank, said in comments reported on Friday.
Beijing: The global economy faces risks from both slowed growth and persistent inflationary pressure, which is spilling over from emerging to advanced economies, Ma Delun, a vice-governor at China's central bank, said in comments reported on Friday.
The People's Bank of China vice-governor's gloom about world economic prospects echoed earlier comments from Chinese Premier Wen Jiabao, underscoring that Beijing policy-makers are not counting on major foreign markets to recover quickly.
Ma told a financial forum in far western China on Thursday that slower growth in the United States, Europe's debt problems, and Japan's poor economic performance were adding to those global risks, the China News Service reported.
"The long-term fiscal sustainability of the United States faces challenges, the European sovereign debt crisis continues to fester, and the Japanese fiscal deficit is growing," the report cited Ma as saying.
"Government debt risks have become a major challenge affecting the global economic recovery," he added.
Ma also warned that "some emerging economies are feeling the consequences of policy contraction, and their rates (of growth) are slowing, and downstream risks to the global economy are increasing," the report said.
Ma said those growth risks co-existed with persistent inflationary pressure, which he blamed on excessive global liquidity.
"Inflationary pressures have spread from emerging economies to advanced economies," he said. Ma's published comments did not directly address how those pressures are affecting China.
But in comments published on Thursday, China's Premier Wen also focused on the mix of sluggish global growth and inflationary pressures, and said fighting inflation remained his policy priority.
Wen said the global economy is still fragile and sovereign debt problems in the United States and Europe are set to put a "drag" on world economic growth. He said China's exporters would suffer from softer external demand and rising costs.
China's inflation ran at 6.5 percent in July, outstripping the government's full-year inflation target of 4 percent.
Chinese factory activity data issued on Thursday indicated that the pace of inflation is quickening, and manufacturers have experienced a sharp drop in export orders partly caused by sovereign debt problems in rich nations.