China will invest up to US$50 billion in new International Monetary Fund bonds, the IMF's first deputy director general John Lipsky said Friday.

"The Chinese authorities have indicated that ... (they) would be interested in investing up to US$50 billion in these bonds when they are ready, and we hope that other countries will follow suit," Lipsky said on the sidelines of the St Petersburg Economic Forum.

Russia has already said it is interested in buying up to US$10 billion of the bonds, which will form part of the extra US$500 billion in capital the IMF is seeking to raise to help it support countries through the worst global economic slowdown since the great depression.

China is the world's biggest holder of gold and foreign exchange reserves, followed by Japan and Russia.

Lipsky said proposals for the bond issuance will soon be submitted to the IMF's executive board, which should also receive the proposals for the issue of new Special Drawing Rights next month.

Lipsky also said the worst of the global economic slowdown had passed and that major currencies were "reasonably well balanced" at present exchange rates.

"In general, the first quarter results globally were weaker than anticipated," he said, not ruling out that the IMF will follow its downward revision of the 2009 Russian GDP forecast with similar moves on other countries.

"The global economy has not hit bottom yet, but the worst of the slowdown is over," he added, noting that in the future economic performance could well surprise on the upside.

The IMF expects that emerging market countries will return to growth in the second half of this year, followed by their developed counterparts in the first half of next year.

On oil, he is doubtful that the recent rise in crude prices would be sustained but added that "we certainly don't look for a return to the very low levels."

(Shanghai Daily June 7, 2009)