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BEIJING — China can boost global economic growth by pressing ahead with reforms to promote domestic consumption and reduce reliance on exports and investment, World Bank President Robert Zoellick said Monday.
Communist authorities have said repeatedly they want more self-sustaining growth based on domestic consumption. But they have made little progress, and investment as a share of China's economy rebounded after Beijing launched a stimulus based on public works spending following the 2008 global crisis.
The World Bank is working with Beijing on developing ways to rebalance the world's second-largest economy, Zoellick told reporters after meeting with Chinese officials.
"The world economy won't get out of this hole by simply relying on austerity policies," he told reporters.
Possible changes might include relying on the market instead of the government to allocate natural resources and overhauling the relationship between state-owned and private companies, Zoellick said.
Zoellick's comments came amid mounting fears the United States might be headed back into recession after the Labor Department reported Friday the economy added no jobs in August, its worst employment report in 11 months.
Coming months will be a "sensitive time" for developed economies as Europe wrestles with a debt crisis and the United States tries to shore up growth, he said.
Weakening global demand might add to Beijing's urgency in trying to promote retail spending and other domestic consumption. But analysts say the many steps required to do that will take time, such as creating more government-financed health care to reduce the need for families to save so much to pay for emergencies.
China's spending on new factories and other investment has accounted for more than 40 percent of its economic output over the past decade — several times the level of the United States, Japan and other major economies. It rose close to 50 percent in 2009 due to stimulus spending, according to the International Monetary Fund.
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World Bank: http://www.worldbank.org
