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Interview: China can speed up world's economic recovery, says U.K.economist
LONDON, Mar 31, 2009 (Xinhua via COMTEX) --
by Xinhua Writer Ma Jianguo
China is in a strong position to
boost its own economy thanks to its large foreign reserves, and can
speed up the world's process of recovery, a British economist said
here on Tuesday.
"With its massive foreign exchange reserves, China is in a strong
position to provide a fiscal boost to its own economy and would prove
to be one of the key players in solving the global crisis", Panicos
Demetriates, an economics professor at Leicester University, said on
the eve of the London G20 summit which starts on Thursday.
Demetriates, who was a World Bank consultant during the Asian
financial turmoil, suggested China can get out of the crisis earlier
by improving welfare provisions to its people, and bringing forward
planned public investments in health, education and environment.
China's economic development in the last 30 years has been
impressive, Demetriates said. Being the world's largest exporter of
textiles, toys, laptop computers, cell phones, digital cameras etc,
China indirectly helps Western consumers to improve their living
standards, as the products it provides are good to use and cheap in
price, he said. The successful export-led growth strategy has also
helped China to garner the largest volume of foreign reserves in the
world, he added.
By making adjustments to its portfolio of overseas investments in
crisis stricken countries, "China could influence the speed with
which the global economy comes out of the crisis," Demetriates said.
"China has the potential to reap substantial investment returns
when the global economy comes out of the current crisis by investing
more wisely now," he said.
The root of the current global financial crisis, according to the
professor, lies in the lack of transparency in Western financial
markets and institutions, which bred a culture of greed among
bankers.
Some bankers gamble and speculate with investors' money, and pay
themselves handsomely. Their gambling activities were not only
unproductive, but have also fuelled an asset price bubble which has
now burst, Demetriates said.
To make things worse, U.S. and British regulators did little to
prevent the crisis from happening, with the excuse of not to
interfere the free market too much, he said.
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