World Bank urges China to lessen dependence on exports

The World Bank will urge China to consolidate and improve transparency at financial institutions, loosen controls on savings and interest rates, and deepen its capital markets in a set of recommendations due to be issued in February, Reuters reported, quoting World Bank President Robert Zoellick on Saturday. Beijing realizes that the export-led growth model that has sustained the country in the last 30 years will not work in the decades ahead, Zoellick told economists at an annual meeting of the Allied Social Science Institution. The World Bank’s recommendations would help China reduce its dependence on exports for sustaining growth, changes that might in turn help to lessen tensions with the US over the value of China’s currency and its ballooning trade surplus. The US trade deficit with China swelled to US$245.5 billion between January and October 2011, compared with US$273.1 billion in 2010 and US$226.9 billion in 2009. The World Bank will also recommend that China limit the role of  powerful state-owned companies, break up monopolies, and lower entry barriers for private firms, Zoellick said.