China has no choice but to shift its economic growth model and boost the share of services in its economy, former US Federal Reserve chairman Ben Bernanke said on Tuesday.
As manufacturing and property investment, the traditional economic drivers, have stalled, the country is right in seeking to shore up consumption and services, Bernanke said in a speech at the Asian Financial Forum in Hong Kong.
Beijing is making a good transition, he said, adding that the slower Chinese growth doesn’t pose a major threat to the world economy.
“Overall the [Chinese] slowdown does not seem to be so severe to threaten the global economy,” Bernanke said.
Commenting on the recent market turbulence and renminbi devaluation, the former Fed chief said that Chinese authorities should have been more transparent about their policy moves.
Currency policy cannot solve all problems, Bernanke said.
“One of my concerns is that the PBoC hasn’t been as transparent as they usually are,” he said.
In other comments, Bernanke suggested that Hong Kong should retain its currency peg to the US dollar as the system is serving the city well.
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