Sydney - Xinhua
In a ranging speech, World Bank Chief Robert Zoellick on Sunday warned of a continuing dangerous world economic climate and said in such fragile times the RMB may prove a surprise winner. Zoellick said the steady Chinese yuan may help global markets pull through "a time of danger." Speaking at the Asia Society's annual dinner in Sydney, Zoellick said RMB and other currencies may form a basket in the future to play the role as the international reserve currency and better serve the world economy. Zoellick said that while China may not be able to repeat its past stimulatory policy due to high inflationary pressures, he was encouraged by both the Chinese leadership's attentiveness and its track-record of working with organizations like the IMF and the World Bank. "Yes, inflation rates and even leadership transition (are a major influence on global markets) ... One thing that could disrupt any transition going into 2012 is an inflation rate that gets to 8 or 9 percent ... So one of the things the Chinese leadership are well aware of is that the growth model of the last 30 years is simply not sustainable," He told an audience that included former Australian Prime Minister Paul Keating. He also said that China's track record of sharing knowledge with the World Bank was creating a "catalyst for consensus" and that placed the institutions in good stead to benefit from China's economic consistence. "The Chinese policy mix includes a tool box of administrative measures ... In general, one of the lessons that the United States and others can learn (from China) is that to have supervisory policies for bank regulatory systems can be a useful part of the tool set." Aside from hinting that over-heating global real estate markets could benefit from China's regulatory tightening, Zoellick suggested if China moved to more market-exposed decision making, he hoped China's bank regulators would not step too far back. "Over time China will be better served to move to more precise and market signals than more administration-based decisions. Over time China will want to move to more market based decisions ... but I don't want this to be interpreted that supervisors don't have to supervise," he said.