Fischer tries to ease fears
China's rapid growth may worry some of its neighbours but in the long run it will benefit the region, says Citigroup vice-chairman Stanley Fischer.
The former deputy managing director of the International Monetary Fund noted enormous fears of the role of China and said the mainland would pose difficulties for other regional economies for a while.
'In the long run, China's neighbours will benefit from a dynamic China. China is bound to become a better market for its neighbours as it grows and opens up . . . Would you rather live next to one a country that is growing fast or [one] growing slowly?' he told a gathering on the sidelines of the Asian Development Bank meeting.
China expects gross domestic product growth of 7 per cent this year after a solid 7.3 per cent last year. Both rates are well above the levels of other economies in the Asian region.
Some of China's neighbours are worried that the mainland's strong growth and huge domestic market will attract even more foreign investment, leaving them with a dwindling share of the global capital pie.
Others are concerned that China's growing exporting power will overwhelm their own industries.
Mr Fischer singled out China and Malaysia for praise for showing flexibility on their exchange rates. Both countries have signalled they would accept more flexibility in the future.
He said governments that drew a line in the sand and said they were committed to defending a certain currency level, usually were courting trouble.
