A revival in private investment is needed to justify current market enthusiasm about China's economic recovery, David Dollar, head of the World Bank's office in China, said on Wednesday. The world's third-largest economy has been showing signs of life thanks to the government's 4 trillion yuan ($585 billion) stimulus plan and a record burst of bank lending, and Dollar said he saw no need for a new pump-priming package.
"My assessment is that the government's stimulus package is the right policy and that definitely helped stabilise the Chinese economy. But until we see the recovery of the private sector, it's hard to get too excited about the future," he told a foreign exchange conference.
Dollar applauded the course China is taking to wean its economy off external demand and said he did not expect a return to the days of export-driven growth. "I'm quite optimistic about the long-term prospects of China, but I do think China will be growing on a different model than it has in the past 10 years," he said.
Comments
Comments are closed.