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Root cause for global economic imbalance lies in north-south divide: Chinese official

11-12-2010 08:45 BJT Special Report:5th G20 Summit in Seoul |

SEOUL, Nov. 11 (Xinhua) -- Global economic imbalance, a result of capital flow, trade imbalance, monetary system imbalance and unsuitable policies of some advanced countries, is fundamentally caused by the north-south divide, a senior Chinese official told a press conference here Thursday during G20 Summit.

Zheng Xiaosong, Director General of the International Department under China's Ministry of Finance, said the G20 members proposed Framework for Strong, Sustainable, and Balanced Growth at the G20 Pittsburgh Summit and China has taken active part in the appraisal work among the G20 members under the framework.

Strong, sustainable and balanced are three equal elements that deserve comprehensive and objective attention. Putting all attention on "balanced" and purposely ignoring "strong" and " sustainable" is imbalanced at the start, he said.

Against the backdrop of slowing global recovery and unstable economic circumstances, the priority is to strengthen coordination of different countries' macroeconomic policies, consolidate the foundation of economic recovery and take responsible macroeconomic policies to promote global sustainable growth, Zheng said.

The director general also said concerted efforts of the international community should be made to address the economic imbalance, and advanced countries, in particular, should take responsible macroeconomic policies.

Issuers of reserve currencies, while making their own policies, should not only take into consideration their own interests but also the possible impact on the global economy. Only by this way can international financial market and international capital market be kept stable, he said.

In the meantime, emerging market countries and developing countries are also advised to accelerate economic restructuring according to their national circumstances.

The international community should make joint efforts to promote financial system reform, encourage fair and just trade and investment, and resist protectionism in any form so as to lay a sound foundation for strong, sustainable and balanced global economic growth, the official said.

"One of the major problems facing the global economy is insufficient aggregate demand, and developed countries, particularly, have seen notable drop in demand. We understand the difficulties and challenges of the developed countries, but we can 't overemphasize the role of emerging market countries in meeting the gap of the aggregate demand, or even put the responsibility on developing countries," Zheng said.

"Emerging market countries account for less than 20 percent of the global economy. It's neither realistic nor reasonable to hold them accountable for meeting the gap left by the countries which take up 80 percent of the global economy."

Zheng said the G20 members should join hands to boost global demand and contribute to global economic growth.

Editor:Xiong Qu |Source: Xinhua

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