China and other fast-growing Asian economies that have benefited from global trade have a responsibility to help poorer neighbours enjoy the same opportunities, a top World Bank official said on Tuesday.
Sri Mulyani Indrawati, one of three managing directors at the World Bank, said rebalancing the global economy should be about more than just reducing the US trade deficit and trimming China's USD 2.8 trillion reserves. It should also include lifting up less-developed countries.
China's export-driven economy enjoyed 30 years of "more or less peaceful" growth, without the frequent crises that have plagued many other emerging markets, she said in an interview ahead of the World Bank's twice-yearly meetings this weekend.
"They used the global market as their export destination, and that's why they could enjoy very rapid growth for a very long time," Indrawati said.
Other Asian economies hoping to emulate China's exporting model can no longer rely as heavily on voracious U.S. consumers now that the financial crisis has sapped Americans' wealth and borrowing power.
Indrawati, a former finance minister for Indonesia whose name has been floated as a possible presidential candidate, said the crisis has taught smaller emerging economies that globalization can offer opportunities as well as risks.
Countries with close trade ties to the United States suffered steeper economic slides when the Lehman Brothers bankruptcy froze global credit markets.
The Group of 20 rich and emerging economies, a club that includes China, India and other Asian leaders, agreed in 2009 to work toward more balanced growth to try to make the world less vulnerable to crisis.
Much of the focus has been on China and United States, the two biggest sources of imbalance. But Indrawati thinks the rebalancing effort can provide wider benefits.
As China and other large, rapidly developing economies gradually redirect their economies toward domestic demand, they can become a source of support for the entire region's development.
"If the country is big enough -- you talk about China, India or even Indonesia -- they can create their own domestic demand," she said.
"You are going to have a more harmonious development of supply and demand so that you can have growth without inflation or ... financial destabilization. That is the art."
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