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Amid the continued slowdown of trade and investment, China has called for an urgent need for global cooperation as the world's second largest economy assured the international community that it will continue to carry out structural reforms.
"There is an urgent need for global cooperation in view of the continued slowdown of global trade and investment, as well as the trend of anti-globalisation and protectionism," Governor of the People's Bank of China Zhou Xiaochuan said in his address to the International Monetary Financial Committee.
"All parties should continue to strengthen coordination of macroeconomic policies, avoid all forms of trade and investment protectionism, and promote free trade and global investment," he said.
Furthermore, in light of the challenges facing global stability, all member countries should make joint efforts in implementing financial sector reforms, strengthening the global financial safety net, and increasing the stability and resilience of the international monetary system, Zhou said.
Zhou asked the advanced economies to introduce an appropriate monetary and fiscal policy mix and use their fiscal policy space, while making sure that medium-term debt is on a sustainable path, to effectively boost demand.
At the same time, structural reforms should be implemented with a focus on encouraging both the public and private sectors to make investments, increasing labour market flexibility, and promoting innovation to raise the growth potential, he stressed.
The Chinese economy grew at 6.7 per cent in the first half of 2016, contributing around 25 per cent to the global growth, he said, adding that the structure and quality of growth have improved steadily.
In his address he assured the IMF that going forward, the Chinese government will continue to maintain stability and consistency of its macroeconomic policies and to implement prudent monetary policy, creating an enabling monetary and financial environment for structural reforms while managing aggregate demand.
China will use various policy instruments to keep banking liquidity at an adequate level and guide the credit and the total social financing to grow at a steady and moderate pace. Fiscal policy will continue to be proactive to support a medium-to-high growth, he said.
Zhou said China will also carry out reforms on all fronts to enhance the quality and efficiency of its growth and the interest rate liberalisation and the reform of the Chinese currency exchange rate regime will be further promoted.
"The capital account convertibility will be improved in an orderly way. We will further enhance the macro-prudential policy framework and improve macro prudential management," he said.
"Efforts will be made to promote supply-side structural reforms with a focus on reducing excess capacity in coal, steel, and other industries, lowering corporate leverage, and dealing with piling debt through market-based approaches, such as debt restructuring, debt-to-equity swaps, securitisation, and liquidation. This will help reduce vulnerabilities and mitigate risks, and the medium and long-term growth potential will be lifted," Zhou said.
