World Bank Says Private Investments Need to Rise for China to Recover

The World Bank warns that China recovery hopes may be premature, in comments made by David Dollar, a World Bank country director, at a foreign exchange conference in Beijing. Dollar states that until there is a recovery in private investment, that it is too hard to get excited about the future. The comments from the World Bank come as traders are focusing on articles in the WSJ and FT noting that China’s National Audit Office states that bank funding in China is being stuck in the pipeline and raising questions of the efficacy of the stimulus measures. There are also growing concerns in the press over the Chinese stock market both noted by MarketWatch and Barron’s. China has also tightened rules on recent lending to prevent misuse of loans according to reports today with concerns over embezzlement though there has also been speculation that some of the sharp rise in recent lending has gone straight to the stock market, helping bolster China’s equity market. Officials are concerned that new risks were mounting to the banking system.