"At the current stage, the European sovereign debt crisis remains severe," said Yi Gang, deputy governor of the People's Bank of China.

"The various countries concerned need to seek political consensus, beef up fiscal consolidation efforts, and make intraregional cooperation mechanisms more effective so as to dispel market mistrust and enable stabilizers to play their role."

Yi made the remarks in a statement at the opening of the International Monetary Fund-World Bank spring meetings in Washington.

The Chinese official noted the IMF had advised advanced countries to reduce their debt to a pre-crisis average of 60 percent of gross domestic product by 2030.

He urged them to strive to reach the debt target "to address global imbalances from its root cause," clearly absolving China from widespread criticism that its artificially weak yuan currency is in part to blame for excessive trade surpluses and deficits.

Taking a broad swipe at the big advanced countries, without naming the United States and others, Yi called on them to get their finances in order to address the dangerous imbalances.

"Systematically important advanced countries need more rigorous fiscal consolidation targets due to their tremendous spillover effects," he said, noting the IMF's targets for them to reduce debt to a pre-crisis average of 60 percent of GDP within 20 years.

According to IMF forecasts, the US debt ratio is expected to rise to 99.5 percent this year and to 105.6 percent by 2013.

earlier related report
Chinese inflation to slow to 4% by year-end: IMF
Washington, Usa (AFP) April 16, 2011 - Chinese inflation should fall to just above four percent by the end of this year on the back of Beijing's tough tightening policies, the International Monetary Fund said Saturday.

"We are seeing credit growth in the first quarter come down," said Nigel Chalk, the IMF mission chief for China, at a news briefing in Washington.

"Should they continue with that trajectory, inflation will come down. We forecast for a little bit over four percent by the end of the year."

On Friday the government reported China's consumer price index rose 5.4 percent in March from the year-ago level -- the highest annual rate since July 2008 -- and 5.0 percent in the first quarter of 2011.

The data added to fears that China was having trouble getting control of inflation as food, fuel and other commodity prices were soaring around the world.

But the IMF said the government had made fighting inflation its top priority and that its policies were having an impact in slowing price rises.

"Our current prediction is that inflation in China should peak shortly and will come down later in this year," said Anoop Singh, IMF director for Asia and the Pacific.

"We can be sure that the measures that they have taken so far, these will be increased until they are certain that inflation is coming down."

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