Comments from the Bank of Canada's Senior Deputy Governor Carolyn Wilkins
- Slowing of China's growth to more sustainable pace is inevitable and desirable
- Economic strategy that China has pursued over the last 15 years cannot continue indefinitely
- History shows transition facing China is hard to manage, takes time and is very likely to be uneven; China may experience periods of economic and financial volatility
- BOC researchers judge China has potential to grow at annual rate of around 6% over next 15 years
- One implication for Canada is that China's demand for commodities should remain high and grow from a higher base
- A shock from China would hit Canada through lower commodity prices, slower trade; direct financial spillovers would be relatively small
- Uncertainty about China prospects has had surprisingly large effect on investor confidence in recent months
- If China growth were 1 percentage point less than BOC's baseline projection, Canada GDP would be 0.1 point lower
- Significant, sudden depreciation of renminbi could be disruptive to global financial system
- If china gears monetary policy towards supporting exchange rate, may be trade-offs with pursuing domestic objectives
Headlines via Reuters
