As the world continued to watch the unfolding financial and economic crises this month, Robert Zoellick, President of the World Bank, arrived in China for discussions on how the country can help support the global economy and the efforts it has taken to strengthen its own recovery. Zoellick, who had seen many uncertainties in 2009, called for China to be flexible with its macroeconomic policy. He made the following comments at a press conference in Beijing on December 15. Edited excerpts follow:

Everyone has recognized that the first six months of 2009 are going to be very difficult.

We are in a very uncertain period. First, in the private financial market, the credit system is still not working effectively. So even though governments have created much liquidity in their monetary policies, financial institutions are still not comfortable with the counterparty risk. In 2009, we will reestablish financial institutions' abilities to lend; otherwise we will have a multiple contraction.

Second, like the World Bank, I am most concerned about developing countries, especially the poorest, because in times of crisis they are the most vulnerable and hit hardest and have the least amount of cushion. If unemployment increases around the world, the problem will get worse, it would lead to social and political unrest and, as you saw last year, high food prices. We try to use our resources as the World Bank Group to help those most vulnerable and use them to mobilize assistance from others.

Third, I am worried about the fact that as countries discount prices and unemployment increases, you could see that a movement toward protectionism is appearing with other problems.

It sounds pretty gloomy. That is why governments are supposed to work together, and their cooperation is more important than ever.

What can the World Bank do? The World Bank has different tools. For the 78 poorest countries, we can provide either grants or long-term loans without interest. In my first year at the World Bank, we were able to get a commitment of $42 billion for the next three years for these poorest countries.

For those slightly better-off developing countries, we have loans from the International Bank for Reconstruction and Development. A month ago, I announced that we had the capital that would allow us to add another $100 billion for loans during the next three years.

Fourth, we have the International Financial Co. for private sectors. We tried to come up with initiatives in certain areas, such as supporting trade, financing and viable infrastructure projects that have lost their financing, and recapitalizing banks in poor countries. We try to help some of the Chinese banks-not the four big banks-to develop capacities for lending to small and medium-sized enterprises and for energy-efficiency projects.

What can China do? I think the most important thing that China can do is to maintain its growth. Before the crisis deepened in September and October, China and other major developing countries had provided multiple-growth pillars that created more balance for the world economy. In addition, I think China should maintain the openness of its market.

China has already taken some important steps to help other developing countries together with the World Bank. In advance of the G20 meeting in Washington (in mid-November), China had announced its economic expansion project which resonated very well globally.

The World Bank's forecast for China's GDP growth next year is 7.5 percent. We have seen a significant slowdown. Some additional numbers released by the Chinese Government on December 15, such as electricity usage and other industrial production, proved that.

This is going to create challenges for employment and perhaps the movement of people from coastal areas back to the interior. That is why the government is taking some actions. I think the government should maintain policy flexibility depending on the course of the events.