China shares financial crisis response experiences with middle-income countries

High-level policymakers from China, Brazil, the United States, Korea and Malaysia will join leading scholars and international development practitioners November 13-15 in Beijing to exchange their experiences with fiscal stimulus packages.

The International Seminar on Fiscal Stimulus Measures in Responding to Financial Crisis: Experiences and Going Forward is jointly sponsored by China's Ministry of Finance and the World Bank and co-sponsored by Beijing Finance Bureau. Among those taking part in the seminar are Vice Finance Minister Ding Xuedong, Senior Vice President and Chief Economist of the World Bank Justin Lin, Secretary of Finance of Brazil's Rio De Janeiro State Joaquim Levy, U.S. Department of Treasury's Economic and Financial Emissary to China David Dollar, and representatives from the Korea Development Institute, along with some 120 mid to senior level Chinese finance officials.

The global economic slowdown which started in the second half of 2008 led to a drastic fall in demand for exports from emerging market economies, along with a drop in capital flows into those economies. The impact of these shocks has been especially severe in countries with high initial current account and fiscal deficits, or with the highly debt ridden household, financial, and business sectors. The Chinese Government, for example, responded quickly with a 4 trillion RMB (586billion U.S. dollar) stimulus package. Now it is assessing how best to design and implement its crisis response to also support the country's longer-term structural changes such as rebalancing its export-driven growth model.

With some countries beginning to emerge from the crisis, can a sustained recovery be expected, or is a double-dip recession on the way? This seminar examines the background and causes of the global financial crisis, how fiscal and financial policy can be used as instruments of macroeconomic control, and analyzes some of the fiscal programs that have been used to stimulate domestic demand, protect and improve people's livelihoods, and encourage employment, and economic recovery.

Developing countries have been hardest hit by the crisis which has called into question many of the established approaches to development. New models will have to be constructed through debate, experimentation, and learning from those who have lived through successes and failures. "Sharing the knowledge that comes from experience is as important as providing finance," says Senior Vice President and Chief Economist Justin Lin, of the World Bank. "The World Bank is helping its client countries use exchanges like this one to learn from each other." This event is part of a series of Development Debates designed by the World Bank Institute.