Think tanks discuss economic recovery in Beijing

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In Beijing, scholars and experts attending the Global Think Tank Summit have been debating the prospects of the global economy. Many believe that though the economy has shown signs of a rebound, there is still a chance it might plunge again. Liu Ying reports.

Compared with a few months ago, the mood of some of the world's most influential economists seems a bit lighter. This is because recent positive economic data is making them believe there might be an end to the downturn.

One example is China. Many think the Chinese government's stimulus measures have had initial success, and that the economy is heading towards a recovery.

Think tanks discuss economic recovery in Beijing

Prof. Li Yining of Peking University said: "It's possible that China's second quarter GDP will be close to 8 percent. It shows that the economy is indeed beginning to recover. But the basis for such a recovery is not very solid. The most important task at present is to make sure the economy does not slide again."

Li Yining says overcapacity and excessive growth of bank loans are the two major risks facing China's economy.

While some summit participants agree that a sustainable recovery is well under way in China, they are not so sure about the prospects of the world economy. Some believe the current situation is better in both the US and Europe than several months ago. But they may wait until next year to talk about a recovery.

Supachai Panitchpakdi, Secretary-General of the UN Conference on Trade & Development, said, "In some areas we are making progress... But whether the balance sheet of banks become stronger? No. Whether the economy is as healthy as usual? By far not yet. Have banks cleaned up their toxic assets? No....Yes, we have seen progress in stock exchanges, but that's mainly speculation... So we should not... and say now we are recovering. We are not by far recovering, not until we see job being created..."

The Secretary-General warns that the sizable public financing worldwide may lead to serious problems at the end of the day. He added that inflation is a potential threat facing the global economy.

The attendees of the summit have also discussed what they call feasible solutions to the economic slump. These include plans to reform the current international currency system, improve consumption and saving models in both developing and developed countries, as well as sticking to economic globalization.

The summit participants believe that some of the world major economies, including China and the US, have shown signs of recovery. But considering the extent of the financial crisis, they say the path to a full recovery will be long and difficult.