On Guard Against External Shocks.docVIP

On Guard Against External Shocks 　　According to traditional Chinese wisdom， the “right climate”is the first of three conditions necessary for success. The other two are “right place” and “right people.” In 2015， the world economy went through financial market turbulence and experienced more slowdown in growth. It appears that this situation will continue in 2016， which means a favorable economic climate may not be possible for China as it journeys towards the goal of doubling its 2010 national GDP and average per capita income by 2020. 　　In a January 4 interview with the International Monetary Funds（IMF） online magazine IMF Survey， IMF Economic Counselor and Director of Research Maury Obstfeld predicted “an abundance of challenges” for the world economy in 2016， including sagging commodity prices， US interest rate hikes， the refugee crisis in Europe and China’s difficult transition towards more service- and consumptionoriented growth. 　　In 2015， China made progress on increasing its say in world trade and investment rule-making. The Chinese yuan was included in the IMFs Special Drawing Rights （SDR） currency basket， an international foreign exchange reserve asset. US Congress finally approved long-delayed reform that will give developing economies， particularly China， more clout within the IMF， reform which was agreed upon by the G20 in 2010. However， the stronger dollar and the USs attempts to maintain its position as lead decision-maker in world trade and investment indicate a bumpy road ahead for the yuan’s internationalization and China’s role in international economic governance. 　　Professor Yu Yongding， member of the Chinese Academy of Social Sciences and former member of the monetary policy committee of the Peoples Bank of China， speaks to NewsChina about how external risks could affect Chinas economy. 　　NewsChina： What is your take on world economic prospects in 2016？ 　　Yu Yongding： Persistent stagnation’ is what I would say about the world economy in 20