WB:Free Trade Zone a Positive Move

Shanghai's pilot free trade zone is a "positive and critical" development, Jim Yong Kim, president of the World Bank Group, said Sunday.

"The pilot zone will allow China to become more competitive," Kim said in Shanghai - the first stop on his second visit to China since he took on his role in July last year.

"This kind of reform in the financial sector will be difficult but it is critical and we will be as supportive as we can for the Chinese government in tackling the difficulties when carrying out the reform," he said.

Shanghai's free trade zone will officially open on September 29.

Commenting on China's economy, Kim said he was encouraged by the government's commitment to reforms to sustain growth and improve the lives of its people.

"Data released in August suggests that economic growth is stabilizing and China's growth goal for this year appears within reach," Kim said. "That target of 7.5 percent is still high by global standards albeit slower compared to past years."

China's gross domestic product expanded 7.5 percent from a year earlier in the second quarter, the weakest in more than two years. But the economy has exhibited signs of stabilization in the past two months.

"China is moving from its old model of export-oriented growth toward a less investment-driven and more consumer-driven economy," Kim said. "Instead of focusing on the quantity of its growth, China is focusing on structural reforms to improve the quality of growth."

He said the bank would continue to support China as it moves to reform its fiscal system, financial oversight, land rights and social programs to achieve growth that reaches more people.

Commenting on the tapering of the US quantitative easing policies, Kim said it was good to see the US economy was back to growth again.

"But it exposes the weakness of the financial sector in some emerging markets, and the key for those markets is to accelerate financial sector reforms and make pubic spending more efficient," Kim said.

Climate change will be a key issue during Kim's four-day visit to China. He said the country was now the largest contributor to global greenhouse gas emission by volume but was becoming a bigger part of the solution in the fight against climate change.

While in Shanghai, Kim will see at first-hand how the World Bank Group and China are cooperating to help the city go green - with an online monitoring platform to measure energy consumption in buildings, by retrofitting buildings to reduce energy use, and plans to pilot a near zero-emission building.

Kim will also discuss with its banking clients the role financial institutions play in supporting small and medium enterprises and building energy efficiency in Shanghai.

Kim will also visit Beijing for meetings with state leaders to enhance relations with China.