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Annual Report 2011-12
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China needs to rebalance its economy but must not focus only on monetary measures, says Prof. Yu Yongding at Exim Bank's Commencement Day Lecture
Prof. Yu Yonding, President of the China Society of World Economics, delivered Exim Bank's 26th Commencement Day Annual Lecture in Mumbai on July 27, 2011.
Distinguished Chinese economist, Professor Yu Yongding, opined that it is inevitable for China to bring about structural changes to make its economic growth sustainable in the long term. Prof. Yu was in India at the invitation of the Export-Import Bank of India (Exim Bank) to deliver the Bank's Twenty-Sixth Annual Commencement Day Lecture. He spoke on the topic "Rebalancing the Chinese Economy."
Prof. Yu highlighted that China has a huge current account surplus, through a positive trade balance by virtue of being an export-oriented economy, and the country must speed up rebalancing its economy so as to sustain its economic growth. "However, the imbalances in the Chinese economy cannot be eliminated only by monetary policy measures," said Prof. Yu.
Prof. Yu is an Academician at the Chinese Academy of Social Sciences (CASS), the President of the China Society of World Economics and the Editor-in-Chief of the journal, 'China and World Economy'. He was a Member of the Monetary Policy Committee of the People's Bank of China. He has authored, co-authored and edited more than 10 books and has published numerous papers and articles on macroeconomics, international finance and other subjects in various academic journals. His main research interests are macroeconomics and world economics.
On the occasion, Mr. T.C.A. Ranganathan, Chairman and Managing Director, Exim Bank of India, said that Exim Bank's Annual Lecture series, instituted in 1986 to mark the Bank's Commencement Day, has earned recognition as an important milestone in contributing to the debate and discussions on contemporary trade and development issues impacting global economy. Dr. Y.V. Reddy, Former Governor, Reserve Bank of India, was the Guest of Honour.
Reflecting on the stability of the global economy, Prof. Yu said, "Now it is quite obvious that the most serious threat to the stability of the global economy is the outbreak of a global fiscal crisis. Europe's periphery is under sovereign crisis. Fiscal position of the US is on the edge. If it were not because of the US dollar's position as an international reserve currency, a fiscal crisis would have happened already."
Highlighting the position of Asian economies vis-à-vis the US economy, Prof. Yu stated that the stability of US government bonds market holds the key to global financial stability. If there is panic selling of the US government bonds, a much more serious collapse of global financial market, than the subprime crisis, that led global financial meltdown, is bound to happen. "Hence, US government has to do everything to maintain the creditworthiness of the US government bonds. Especially, because foreign investors hold more than half of the securities, the US government has to go to all lengths to convince foreign investors on the safety of US government securities," Prof. Yu stated.
For further information, please contact
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Export-Import Bank of India,
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