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CHICAGO, Jan 7 (Reuters) - The World Bank will recommend reforms to China's domestic financial system as part of broader proposals to help wean the country from a dependence on exports to sustain economic growth, World Bank President Robert Zoellick said on Saturday.
Those changes could have the benefit of increasing confidence among Chinese authorities that the nation's economy will not be destabilized by foreign exchange reforms,nike air max 2012 cheap Zoellick said. U.S. and other international authorities have long urged China to let its yuan currency, also called the renminbi, to float more freely on foreign exchange markets.
"China's policy on the exchange rate will depend in significant part on whether Chinese officials believe the structure of the economy can adjust to the price signals of changed exchange rates," Zoellick said.
"The Chinese ... recognize that this reform agenda, including a stronger and more flexible financial sector would move hand in hand with the internationalization of the renminbi," he said.
China's government realizes that the export-led growth model that has been so successful for the past 30 years will not work in decades ahead, the World Bank chief said at the annual meetings of the Allied Social Science Associations.
The World Bank, in a series of recommendations due to be released in February, will suggest changes including fewer but stronger fiscal institutions that are more transparent and more accountable, Zoellick told the economists' conference. The bank's proposals are part of a year-and-a-half collaborative project with the Chinese government.
While Beijing has allowed its yuan currency to float in recent years, critics say Beijing has not permitted it to appreciate enough. The U.S. Treasury last month avoided formally naming China a currency manipulator under law but chided Beijing for not moving quickly enough on reforms.