China and rebalancing

Kato noted that global rebalancing means that in countries with substantial current account deficits, savings must be increased. And on the part of countries with significant current account surpluses, efforts to increase domestic demand will be increasingly important.

"Chinese Prime Minister Wen Jiabao as well as other leaders have affirmed several times the Chinese authorities' intention to encourage more private consumption," he noted. "I think that intention is consistent with global rebalancing agenda."

Kato also said China can further contribute to rebalancing initiatives by increasing households' purchasing power and making investment in the non-tradable sector more profitable.

The rise pf G20

As to the rise of G20, Kato said that amid the deepest crisis since the Second World War, policy coordination and cooperation among players are most vital to the global economy. That is the background against which the G20 framework has become prominent.

"We at the IMF think the recovery process will be slow. But given the nature of the recovery, it is critical for the G20 to play a role of policy coordination, so that the global economy can be on a more solid footing," said Kato.

"China is a very prominent member of G20 and China's role will be critical in that process," he added.

Kato also noted that the G20 framework should make more voices of low-income countries heard. "There can be many ways, and I am sure G20 leaders are looking at effective ways to represent low-income nations."

At the Pittsburgh summit in September, G20 leaders agreed to at least a 5-percentage point shift in IMF quota shares to dynamic emerging and low-income countries from other IMF members, he said.

"That is one testament that the voices of emerging and low-income countries will be increasingly strengthened," he said, "The IMF and the World Bank to some extent are trying to represent the views of low-income countries through our universal membership."

(Xinhua News Agency October 28, 2009)