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SHANGHAI, CHINA - CHINA'S economy has weathered the US financial crisis better than expected but many external concerns remain, the country's central bank chief said in comments reported on Monday.
'The negative impact of the US sub-prime crisis on the domestic economy seems so far smaller than originally expected,' Dr Zhou Xiaochuan said, according to the Shanghai Securities News.
Restructuring in the financial system has made China's financial institutions more healthy and losses caused by the US credit crunch were 'controllable and digestible', he said.
But Dr Zhou, who made the remarks during an International Monetary Fund meeting in Washington over the weekend, warned China's economy is faced with mounting external uncertainties, which makes it harder for policy decisions.
Factors clouding the outlook of the global economy this year include turmoil in financial markets due to the US sub-prime crisis, inflation pressure and rising protectionism in some developed countries, he said.
Preventing runaway inflation and overheating in the domestic economy remained the two key tasks for the Chinese authorities, he said.
China is scheduled to release key economic data for the first quarter on Thursday.
Dr Zhou also repeated that exchange rates had only limited effects in easing trade imbalances and their role should not be overplayed, amid the continued push by the US for China to end controls on its currency, the yuan.
'The role of exchange rates in solving the imbalance in global trade is limited. Exaggerating their effects is unrealistic and will mislead the rebalancing process,' he was quoted as saying. - AFP
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