International Monetary Fund (IMF) vice president Zhu Min said in Hong Kong yesterday that China's economy is heading for a soft landing. He believes that inflation is a long-term challenge facing China. At the same time, the formation of the RMB exchange rate flexibility mechanism is more important than the RMB exchange rate level.

Zhu Min delivered keynote speech yesterday at the Credit Suisse Asia Investment Forum in Hong Kong. He pointed out that although the recent economic data released by the United States has improved, the national debt is still at a high level, which may affect the consumption power of the residents and weaken the strength of economic recovery. European financial markets have stabilized, but are still fragile. Greece's debt pressure has been temporarily relieved, the European debt situation has been temporarily stable, and the credit crunch has improved. But in the future, a large number of sovereign debt will expire in the whole euro area, and the European financial market is still fragile.

Zhu Min said European financial institutions In the process of deleveraging, the sale of US dollar pricing assets and the reduction of loans, especially syndicated loans, also led to fluctuations in capital markets in September last year. He pointed out that the vulnerability of the European economy will affect exports, stock markets and money markets in the Asian region. At present, capital inflows and outflows are frequent and capital markets will continue to fluctuate.

Prior to this, JP Morgan has released a report that recently released data such as car sales, cement and steel production showed that China's economy has been in a "hard landing" state.

Zhu Min believes that China's economy is heading for a soft landing. He pointed out that the data released in the first two months were weak, causing some people to worry about whether China's economic slowdown is too much. He believes that the real worry is inflation and inflation pressure will be a long-term problem for China.

He pointed out that at present, investment accounts for 47.8% of China's GDP, and China should properly handle the pace of slowing investment. China's economic growth will be driven by domestic demand driven by exports and investment, and it needs long-term implementation, including the establishment of other housing, medical and educational safety networks. Zhu Min believes that China's domestic demand grew by 40% last year, equivalent to 1/3 of the global consumption stimulus growth, and the results were good.

For the internationalization of RMB, Zhu Min It is necessary to set up more investment channels. He pointed out that the international community and China both expect the RMB exchange rate to be more flexible. He believes that the formation of the RMB exchange rate flexibility mechanism is more important than the exchange rate level.