Former governor of central bank Zhou Xiaochuan says China can fuel regional growth amid global high interest rates

Global high interest rates make the cost of borrowing higher with China remaining a prime option for funding to fuel growth in the region, and Hong Kong can play a role in the Belt and Road Initiative, according to a former governor of China’s central bank.

Zhou Xiaochuan also called for global efforts to offset geopolitical and economic headwinds in an address in Hong Kong on Wednesday at an investment forum by the China Investment Corporation, the country’s sovereign wealth fund.

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Decoupling, de-risking and geopolitical conflicts have affected global trade, cooperation on investment and finance, and the readjustment of global industrial and supply chains have also posed challenges to countries’ growth, said Zhou, who was governor of the People’s Bank of China from 2002-18.

“Asia will continue to become the main engine of global growth despite the headwinds in the global economy, and countries along the Belt and Road Initiative will become the important growth engine,” Zhou said.

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“China and other countries with low inflation and high savings rates can provide massive and low-cost funds to Asia and [belt and road] countries.

“Hong Kong, as a global financial hub, can play a bigger role to push the [belt and road] and sustainable development in Asia.”

Hong Kong leader John Lee Ka-chiu said at the forum that the city was committed to remaining competitive in global financial market.

“We are committed to making Hong Kong a globally attractive market where investors looking to promote international industrial cooperation can contribute to sustainable development and realise a welcome return on their investment,” Lee said.

More to follow…

South China Morning Post