Countries around the world must diversify their supply chains and reduce dependence on China, which "may be good for everyone", World Bank President David Malpass said Tuesday (12/4).
According to Malpass, cross-border trade will remain important to the global economy, and China - already the world's second largest economy and likely to be the largest - has a large role to play, both as a consumer and producer of goods.
However, speaking at an event in Warsaw, Poland, he said, China also needs to be part of the value system that other countries have in the global trading system. "I don't know if that will happen," he said.
Asked about whether China is headed for a crisis due to its strict Covid-19 lockdown and debt problems in its property sector, Malpass said: "They are experiencing setbacks, major setbacks on various fronts, and growth forecasts have been lowered".
However, he said, the World Bank continues to cooperate well with China, which is a major shareholder. The World Bank is also working with China to push for more transparency of its lending to developing countries.
"So I think the way I think about it is, the world needs to interact with China, recognize that it's important in the world and it's getting more and more important," Malpass said.
However, he couldn't believe the world was facing a new "Bretton Woods moment," a reference to the 1944 conference that changed the architecture of international finance and created the World Bank and International Monetary Fund (IMF) amidst the ruins of the Second World War.
The system, with the US dollar at its core, "works pretty well", he added.
"My view is, we're not at that point right now, at all. There's no sense of the world being lost," said Malpass. "There is a sense of unity in most of the world in one effort, which is to end the war in Ukraine."
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