IMF Chief Lauds Asia’s Economic Role, Cites Dangers Ahead

Posted November 9th, 2011 at 2:50 am (UTC-5)
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The head of the International Monetary Fund is promoting the important role of Asia in the recovery of the global economy and urging the region to be ready in the event of another worldwide recession.

In a speech Wednesday at the International Finance Forum in Beijing, Christine Lagarde said the economic rise of Asia is “the defining economic success story of modern times.”

Lagarde had particular praise for China’s economic growth, which she says has pulled 500 million people out of poverty over the last three decades. She says China needs a stronger currency “in real effective terms.”

The United States and the European Union say Beijing has artificially depressed its currency to benefit domestic exports and put foreign imports at a disadvantage.

Lagarde also urged China to switch from an economy fueled by exports to one driven by domestic consumption.

The former French finance minister says the world economy remains at risk of a “downward spiral” of uncertainty and financial instability if countries do not address problems such as the European debt crisis.

Lagarde is expected to meet with Chinese officials to discuss the possibility of China investing some of its $3 trillion in foreign exchange reserves in a eurozone bailout fund.