Time still not ripe for US interest rates to rise, says China’s finance minister Lou Jiwei

It is not yet a good time for the United States to raise its interest rates as the global economy is still sluggish, Finance Minister Lou Jiwei said, signalling Beijing’s unease about the impact the move might have on the Chinese economy.

“The US economy has benefited from the position [of the US dollar] in the global currency system, and has revived relatively faster,” Lou was yesterday quoted by the People’s Daily website as saying on the sidelines of the International Monetary Fund and World Bank annual meetings in Lima, Peru.

“The US should bear more global responsibility and is not yet in the condition for an interest rate hike,” he said.

The US Federal Reserve last month delayed an expected increase in its benchmark interest rate, citing low inflation and weakening global growth. But Fed chairwoman Janet Yellen has made clear that she expects the rate to be raised before the end of the year, from its present record low since 2006.

Lou said developed countries should play a more active role in driving global economic growth and supporting developing economies’ structural adjustments. As China adjusted its economic structure, he said, it would continue contributing to the global economy, but it would be unrealistic to expect the country to keep up the pace of growth it had achieved in the past.