World Bank President Robert Zoellick says the outlook for the global economy remains uncertain, but China might help to foster global economic recovery.
World Bank President Zoellick spoke Tuesday to a global private equity conference in Washington, D.C. He said he has been hearing mixed reports from economists and financial leaders.
"My reading of these different reports is that we still face a very high degree of uncertainty," said Robert Zoellick. "But of course, it's a deadly mistake to let uncertainty paralyze you."
Zoellick encouraged business leaders to invest in developing markets, saying they will present new opportunities when the world emerges from the "wreckage" of the current global recession. And he said he sensed some optimism among global leaders he met last month at the G-20 summit in Europe.
"One could sense sighs coming from the room," he said. "Now they could have been sighs of weariness, but I think primarily they were sighs of relief because the ministers and central bankers feel that they have broken the fall."
Zoellick said since this economic downturn is global, the world can expect a slower, more gradual recovery. But he said China could play a positive role.
"Now a positive spark is that I suspect China might surprise us on the upside," said Zoellick. "China acted quite quickly and aggressively to stimulate demand, and has had some pretty good first quarter numbers."
Zoellick said when you examine the numbers closely, the good news from China results mainly from government spending, and it remains to be seen when the country's private sector will boost its investments again.
China reported Tuesday that its exports decreased for the sixth straight month, suggesting that overseas demand for Chinese products is still weak.
And the Commerce Department said the U.S. trade deficit rose in March for the first time since last July to $27.6 billion, with the global recession also hurting American exports. America's politically-sensitive deficit with China rose 10 percent in March, to $15.6 billion. China has been the country with the largest trade surplus with the United States for more than a decade.