"The Chinese economy has shown signs of recovery on the whole, but we are still in a tough fight with the global financial crisis," said Zhou Xiaochuan, Governor of People's Bank of China (PBC) on April 18 in China's southernmost province of Hainan.

"The positive financial policy and the moderate monetary policy formulated in November last year have prevented China's economy from rapid slow-down," said Zhou at a breakout session of the 2009 Boao Forum for Asia. The topic of the sub-forum was "Reform the International Financial System: the Role of Emerging Markets".

Last year, the primary goal of China's macroeconomic control was to prevent inflation. However, the world situation changed drastically in mid-2008. In September, the Chinese government made a prompt policy adjustment and in November, it announced its positive financial policy and moderate monetary policy. At present, Zhou Xiaochuan said, China was keeping a close eye on the ongoing crisis and was ready to adjust its policies at any time.

With regard to the impact of financial crisis, Zhou Xiaochuan said some emerging countries had investments in toxic assets, but fortunately, the amount was not large and thus no severe damage had been done.

Rather than a loss in investment, the financial crisis was exerting a more negative impact on the confidence of consumers and businesses, which would be a bane to the financial market of emerging countries.

As the financial crisis unfolded, the demand for imports in the industrialized countries was falling. The sluggish export situation would also have a negative influence on the economic situation of emerging countries.

According to Zhou Xiaochuan, to lessen the impact of the global financial crisis, emerging countries should do everything possible to keep their economies growing. At the same time, they should learn an important lesson from the crisis and strengthen the fundamentals of their financial systems.

(China.org.cn April 19, 2009)