Zoellick: Challenges face Chinese economy

BEIJING, Sept. 5 (UPI) -- China's economy will face structural challenges as the global economy enters "a danger zone" this fall, visiting World Bank President Robert Zoellick warned.

China needs to speed up transforming its economy from being export-driven to one of consumption-led, a task that may not be easy to achieve, China Daily reported Zoellick said while visiting Heilongjiang province.

"The bigger challenge for China in the autumn is if events [in the global economy] lead to a deeper downturn that affects demand for China's exports," the World Bank official was quoted as saying.

"China needs to be thinking about the structural basis for future growth."

The reference to the "danger zones" stems from various indicators that point to a disturbing reading for the global economy, the newspaper said.

The European Commission monthly report noted business and consumer confidence in the euro zone for August slid to its lowest level since May 2010. The White House reportedly has said U.S. gross domestic product growth will remain between 1.7 percent and 2.1 percent in 2011, down from an earlier forecast of 2.7 percent.

"The world economy is entering a new danger zone this autumn," Zoellick said earlier in Beijing. "China's structural challenges occur in the current international context of slowing growth and weakening confidence."

The China Daily report said many economists have already lowered their expectations for China's growth this year because of the global situation. For example, UBS global financial services firm cut its 2011 forecast for China's GDP growth to 9 percent from 9.3 per cent, and from 9 percent to 8.3 percent in 2012.

"I think it's a good sign that [China's] 12th Five-Year Plan [2011-2015] has recognized the need to shift the nation's growth model," Zoellick said.