Beijing: The World Bank Friday refuted claims that it withdrew a report critical of China's financial sector under pressure from the Chinese government and said the economic fundamentals of the country are sound despite the recent equity market volatility.
Addressing a press conference here, World Bank President Jim Yong Kim also played down any rivalry between the World Bank and China-led Asian Infrastructure Investment Bank in which India and 56 other countries have joined despite criticism from the US and Japan.
Denying that a section of the Bank's China Economic Update report calling on Beijing to accelerate reforms of the state controlled financial sector was withdrawn under pressure from Chinese government, Kim said that the section was "simply an error".
"It did not go through the regular clearance mechanisms within the World Bank Group and when we found that it had been put up without going through the regular processes we took it down," he said, winding up his three-day to China.
"There was no pressure or communication with the Chinese government at all," Kim, who met Chinese premier Li Keqiang yesterday, said.
"We think that the commitment to reforms and the fundamentals of this economy are very promising and that we will continue to work closely," he said.
The Financial Times earlier reported that on July 3, the World Bank redacted a section of its latest update on China's economy.
Kim said China's economic fundamentals are sound despite the recent equity market volatility leading to loss of USD 3.2 trillion capital.
"It's important to remember that this is a relatively young stock exchange. In situations all over the world, governments have taken different measures to reduce volatility in their stock markets," he said.
Referring to his meeting with Jin Liquin, Chinese nominee to be the President of the AIIB, he said the World Bank welcomes the AIIB's establishment given the overwhelming need for global infrastructure investment.
He also spoke of prospects of the two banks co-investing in projects.
He said officials of the two Banks will hold a meeting later this year in Washington to discuss specific projects in which both will co-investors.
On Chinese economy he said, "China has built the world's second largest economy and it has undertaken significant reforms aimed at providing all of its citizens with an opportunity to enjoy greater prosperity," he said.
China has strong resolve in continuing to adopt fiscal and financial reforms to transform its growth model, he said.
While China's growth has gradually slowed since 2012, it remained "the largest contributor to world growth since the global financial crisis" with roughly 30 percent of global growth coming from China alone over the last couple of years, he said.
China's growth slowed to 7.4 percent last year and the WBG predicted about 7-percent economic growth for 2015, which is "still the envy of the world," he said.
Despite recent stock market fluctuations, "China's economy is strong and its fundamentals are sound," he said.
During Kim's visit, the World Bank Group (WBG) and China signed an agreement yesterday to set up a USD 50 million trust fund to help reduce global poverty.
The fund aims to enhance the WBG-China cooperation and leverage financial and knowledge-based resources to help developing countries achieve inclusive and sustainable development, the WBG said in a statement.
The fund worth USD 50 million is expected to start later this year and it will finance investment projects, operations, knowledge development and human-resource cooperation at both global and regional levels.
"China is a strong partner in development and a strong partner for the WBG, and we share the commitment to ending poverty and boosting shared prosperity," Kim said.
