Zoellick, in Beijing this week for talks with Chinese leaders, said he was not worried about inflation as it was more important to keep the economic revival on track.

"China's actions have helped to prevent the global crisis from getting worse and I agree with its leaders that it's too early to roll back fiscal and monetary measures," Zoellick told a news conference.

"The recovery might be here but it could falter."

Zoellick said he now expected China's economy to grow by nearly eight percent in 2009 -- a figure which he noted was higher than the World Bank's official forecast of 7.2 percent.

Strong growth in the Chinese economy had contributed to the early signs of a global recovery, Zoellick said.

"With growth in China now projected at close to eight percent for 2009 as a whole, and signs of stabilisation in many other economies in Asia and around the world, the chances of a truly global recovery have increased measurably." Zoellick, who met Premier Wen Jiabao on Tuesday, said China recognised there were still "large uncertainties" facing the country and that it was important to "maintain the monetary and fiscal stance", not "shift to exit strategies".

Wen told Zoellick during the meeting that China would continue to pursue a proactive fiscal policy and a moderately loose monetary policy, according to state media.

China last year unveiled an unprecedented four-trillion-yuan (580 billion dollars) stimulus package aimed at boosting domestic demand as exports plunged.

Zoellick arrived in China on Monday for a visit focused on global recovery from the financial crisis and the Chinese economy.

He met officials from China Investment Corporation, the country's 200-billion-dollar sovereign wealth fund, to discuss the idea of joining an asset management company which the World Bank hopes will become a different model for its financial mediation efforts.

"As opposed to... raising debt or making loans and equity investments, we would intermediate as an asset management corporation," Zoellick said.

"CIC has expressed interest in this as a commercial investment vehicle but no decision has been made on their part."

In addition to his meetings in Beijing, Zoellick was due to visit World Bank-supported projects in eastern Anhui province.

earlier related report
China to seek more private investment: state media
China is planning to seek more private investment in an apparent bid to balance its path to economic recovery, which so far has relied heavily on government spending, state media said Thursday.

The National Development and Reform Commission, China's top economic planning agency, has submitted draft rules on the issue to the State Council, or cabinet, the Shanghai Securities News said, citing an unnamed NDRC official.

Under the rules, private investment will be encouraged in a wider range of sectors including infrastructure, the financial industry, culture, education and public services, which have been dominated by state-owned firms, it said.

Private firms will also get easier access to fund-raising, face lower taxes and be subject to fewer administrative licensing requirements, the report said, without giving further details.

China last year unveiled an unprecedented four-trillion-yuan (585 billion dollars) stimulus package aimed at boosting domestic demand as exports plunged.

The world's third largest economy expanded by 7.9 percent in the second quarter, up from 6.1 percent in the first quarter, mainly as a result of massive government investment.

But economists have argued private investment, which has remained sluggish amid the financial crisis, needs to be stimulated to maintain momentum as the unprecedented amount of government spending may not be sustainable.

In a survey released last month, the All-China Federation of Industry and Commerce said the stimulus package had actually crowded out private firms as loans were increasingly difficult to get from banks focused on state projects.

Wang Yuanjing, a researcher with the NDRC's Investment Research Institute, said it would be "impossible" to achieve long-term "sound and fast growth" on government spending alone.

"Government investment can act as an engine, but much larger investment would eventually come from the private sector and the society as a whole," he told AFP.

European firms sees slowing of China reforms
A leading European business group in China said Wednesday that Beijing was backtracking on the implementation of reforms aimed at opening up the world's third largest economy to foreign firms.

"In many sectors there is a slowdown, even a partial reversal, of reforms," Joerg Wuttke, the president of the European Union Chamber of Commerce in China, told reporters as he presented his group's annual report.

According to the report, which each year offers Chinese authorities a list of proposals, European businessmen have noted that opening-up measures have tapered off over the past year, as the global economic crisis took hold. Leaders in certain sectors said the situation had worsened due to government intervention and restrictions on foreign investment.

"We're calling again for measures to create a fair and transparent environment," the chamber said, while noting "positive" changes in several areas such as antitrust law and the granting of 3G mobile phone licences.

But the group pointed out that foreign companies wishing to operate in China continued to face major barriers, such as the need for auto companies to create joint ventures with local firms. Wuttke said certification rules were implemented in certain sectors to limit market access or keep foreign companies out altogether.

He cited the example of an unnamed company that was the leader in providing encryption technology to Chinese banks, telecoms firms and transportation companies.

But the European firm was forced out of the market when China introduced new rules requiring a certain certification that no foreign firm or foreign-invested Chinese company has been able to obtain, he said. "This is definitely a discriminatory process against foreign companies," Wuttke said.

Share This Article With Planet Earth

del.icio.us	Digg	Reddit
YahooMyWeb	Google	Facebook

Related Links
The Economy

Memory Foam Mattress Review

SPACE MEDIA NETWORK PROMOTIONS Solar Energy Solutions Tempur-Pedic Mattress Comparison ... Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News