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China's economic resilience offers hope for global growth - BIS general manager

Xinhua | Updated: 2022-07-05 13:06

Bank for International Settlements (BIS) General Manager Agustin Carstens arrives for a G20 plenary session during IMF spring meetings in Washington, US, on April 20, 2018. [Photo/Agencies]

GENEVA -- China's resilient economy continues to be an engine of global growth, a senior bank official has said.

"Unprecedented combination of factors" have generated a spike in global inflation, but China hasn't had the spike in inflation that other countries have been observing, and that has given some latitude to China's central bank to adjust its monetary policy constructively, Agustin Carstens, general manager of the Bank for International Settlements (BIS), told Xinhua in a recent interview.

The world has been battling high inflation triggered by simultaneous shocks, Carstens said.

The oldest international financial institution based in Basel, Switzerland, published on Sunday its flagship Annual Economic Report, saying that the global economy risks entering a new era of high inflation and calling for central banks to restore low and stable inflation, minimize the hit to economic activity and safeguard financial stability.

The world economy under severe shocks needs a China with strong economic growth, Carstens said, adding that China has been an engine of global growth for quite some decades. "I think it's important for that to be preserved."

Tighter monetary policy is essential to "bring the dynamics of inflation under control," Carstens added.

Global growth loses momentum as inflation returns, the BIS report noted. Carstens said tackling the challenge requires bringing down inflation and addressing financial vulnerabilities.

In the medium and long term, "we should move away from depending on the healing powers of fiscal and monetary policies," said Carstens. He suggested that economic growth should depend more on structural reforms, international trade and other aspects that contribute to more sustainable growth.

Carstens said the global trading and financial systems must not be fragmented, adding that countries should implement structural reforms and improve infrastructure and health systems to build more resilient economies.

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