Good news on employment will help to maintain confidence in the EU economy. Strong internal demand is progressively taking over from exports as the motor of the EU economy. Better than expected progress with improved public finances will help to maintain confidence in the financial markets and keep interest rates down. This helps to ensure favourable conditions for private investment in Europe which is vital for growth and job creation. China has successfully resisted external pressures.
China also has a sound economic situation.
China has opted to rely on stimulating domestic demand through interest rate cuts and expansionary fiscal policy measures, including ambitious infrastructure spending. At the same time, the Chinese authorities have wisely avoided devaluation. Tax rebates are instead preserving the export competitiveness of Chinese products. Since August 1998, the figures have been showing a positive trend. In my view, China took the right policy decisions and has protected South East Asia from another round of financial turbulence by keeping its currency stable.