World Bank Chief Positive about Chinese Economy

President of the World Bank Group Jim Yong Kim said Wednesday he is positive about the Chinese economy and the country’s structural reform.

Kim made the remarks in an interview ahead of a two-day meeting of G20 finance ministers and central bank governors. The meeting would be opened in Shanghai on Friday.

Despite China’s slowdown in economic growth, Kim said the country’s nominal GDP for 2015 was still worth as high as 13.3 trillion U.S. dollars and China’s structural reform is actually working.

“We think that there are things that are happening here that are very positive from the perspective of the decision that was made to change the drivers of growth. We do see consumption is up. We do see the service industry is now more than half of the Chinese GDP,” said Kim.

Kim praised that China’s structural reform sets a good example for the world to gain sustainable prosperity.

“China is making reforms in the financial sector, in terms of government services and practices, reforming very difficult to reform things like pension system and Hukou system. But that is what’s needed, especially in the high-income countries,” said Kim.

Kim suggested the Chinese government should stick with the structural reform and actively communicate with all sides involved about fiscal and monetary policy.

“The message, of course, is stick with its structural reform agenda. And the second advice I would give is communicate, communicate, communicate. Now the thing is we’ve already seen change. And I think Premier Li Keqiang has stated very clearly that communication about decisions that are being made in terms of fiscal and monetary policy will be more important for China going forward. I think that’s very, very welcome,” said Kim.

Talking about the newly-founded Asian Infrastructure Investment Bank (AIIB), Kim said the World Bank is now working with it and is looking for opportunities for co-investments.

“We are looking right now very intently at possibilities for co-investment very, very soon. We still have a lot more infrastructure to bring the deals together than they do. So it’s very possible that the first few loans could be co-investments with us and potentially with the Asian Development Bank,” said Kim.
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