PBOC governor calls for action on global growth

China's central bank governor said Saturday that action is needed to boost the global economy and that the governance reform of the International Monetary Fund (IMF) should be finished without delay.

In a statement at the meeting of the International Monetary and Financial Committee, Zhou Xiaochuan, governor of the People's Bank of China, said the global economy remained fraught with challenges despite some encouraging signs over the last six months.

"To achieve sustainable recovery and safeguard financial stability, further policy progress is called for in the advanced economies," he told the IMF panel.

"Prolonged easing could exacerbate the financial vulnerabilities and affect the stability of the international monetary system," he warned however, while also reminding emerging and developing economies to remain "vigilant about domestic vulnerabilities."

Zhou also said it is imperative not to further delay the IMF 2010 quota and governance reform. He urged IMF members that have yet to ratify the reform package to do so as soon as possible.

Meanwhile, Zhou called for efforts to reach an agreement on a new quota formula and cooperation to complete the 15th General Review of Quotas of the IMF by January 2014.

As for China's economy, the central bank governor said economic restructuring has so far proved its effectiveness.

China's experience of economic development indicates that advancing policy reform and structural adjustment not only serves to improve growth potential in the longer term, but also gives an obvious boost to the economy and employment in the short term, Zhou noted.

In the first quarter, the contribution of the services sector to the economy increased by 1.6 points to 47.8 percent, marking the first time the services sector has overtaken the manufacturing sector, said a statement on the central bank's website.

The central bank's statement reiterated the new government's commitment to steering China's economy toward a more sustainable growth model.

China has been accelerating its pace of economic reform in various ways, including an expansion of the value-added tax reform and more moves to reduce government intervention in the economy, according to the statement.