The prospects for recovery in the global economy have improved due to the high economic growth rates in Asian countries like China, signs of a rebound in the United States and better performances of the European and Japanese economies, the International Monetary Fund chief Horst Kohler said in Beijing on Monday.

There are increasing signs of an economic rebound in the US; expectations of a pick-up in Europe have improved and a tentative recovery also seems to be taking hold in Japan, Kohler said.

Addressing a luncheon hosted by the People's Bank of China, the country's central bank, Kohler said Asia remains a bright spot in the world economy, citing its gross domestic product growth of over 6 per cent in 2002.

Kohler called for advanced countries to tackle their deep-seated structural problems as part of the cooperative efforts to ensure a gradual and orderly correction of large global current account imbalances.

He said greater exchange rate flexibility in Asia should also be part of a gradual process of reducing global current account imbalances.

Commenting on China's economy, he noted that China's strong growth, averaging about 9 per cent per year over the last decade, and expanding trade have significant potential benefits for both the global and regional economies.

"The rising imports of goods to satisfy domestic demand have made China an increasingly important export destination for many of its trading partners. The expansion of China's trade within Asia has also contributed to rising specialisation of production in the region, allowing countries to better exploit their comparative advantage," he said.

China's growing presence in world markets has "clearly increased competition for some producers in other countries, but it also has benefited consumers world-wide," the IMF managing director, now on his fourth visit to the Communist nation, was quoted as saying by the Xinhua news agency.

"The process of gradual market-oriented liberalisation that China has followed has served the country well and China's recent steps in line with its commitments under the World Trade Organisation accession agreement have further contributed to the rapid expansion of trade and real incomes," he said.