Protest over World Bank bleak prediction for China
28 Feb, 2012 13:58
A one-man protest has disrupted a conference in China by the World Bank President Robert Zoellick. He thrust leaflets into the hand of Zoellick while saying “The World Bank report is poison to China.”
Du Jianguo, who claims to be an economist, was angry over a World Bank prediction the country’s economy could run into trouble if it doesn’t cut down on state interference."The World Bank calls on China to privatize our state-owned enterprises, they want to partition these big companies. But actually they are helping western companies get rid of their Chinese competitors,” he shouted before being ejected from the auditorium. The World Bank suggests fewer barriers for entry into the country’s market, in order to break up some state monopolies. It also recommends an increase in tax rates for state-owned firms. "So to reduce China's global savings rate and also benefit the Chinese people, if a lot of those dividends (from state-owned enterprises) are sent back to provide social benefits for the Chinese people, you will have structural change and help support some of the social security systems," said Zoellick. Experts agree China’s development may slow down. The country has been showing a steady growth for 30 years, being a safe source of global development. Economists Barry Eichengreen of the University of California and Kwanho Shin of Korea University note that “China's annual growth rate will begin to "downshift" by at least two percentage points starting around 2015”, WSJ reports.China’s downshift isn’t being helped by a general slowdown in the West. “The Chinese economy is export driven and Europe and U.S. are almost broke so they won’t be buying all that stuff from China. And if it starts exporting much less, you will have slow growth,” said RT’s business editor Nick Pool.” And China is also huge debt holder of US bonds, and the US will be printing money to lower the amount of debt. And it’s going to create political tension.” More on the prospects of China economic development and its role in the world financial institutions, such as the World Bank and IMF, watch this report.