China needs to be prepared for the "worst case scenario" amid a deepening global economic crisis, central bank Governor Zhou Xiaochuan said yesterday.
Zhou also urged the United States government to take more measures if needed to help stabilize the global economy and financial markets, Jin Qi, head of the international department of the People's Bank of China said in Beijing after a meeting of the Strategic Economic Dialogue.
China's government "should take timely, effective and preemptive measures, analyze the progress, evolution and outlook of the crisis and be especially prepared for a worst-case scenario," Jin quoted the central bank governor as telling the meeting. The US "should evaluate the effectiveness of the measures it has taken and adjust or take more measures in a timely manner."
Zhou said excessive US consumption and over-reliance on debt were key reasons for the crisis, and he urged the US to raise its savings rate and reduce its budget and trade deficits.
He also said China and the United States should increase cooperation to regulate financial derivatives and unconventional banking arrangements. Zhou urged the two sides to strengthen regulation for safeguarding financial stability while pursuing development, to enhance macro-management of the economy and push toward economic balance.
China's export growth to the US, its second-biggest market, is slowing as a recession in the world's largest economy damps consumer spending. The central government last month announced a 4-trillion-yuan (US$586-billion) stimulus package to sustain expansion amid a deepening global slowdown and a crash in the domestic property market.
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