With the U.S. financial system still reeling and recessionlooming on Europe"s doorstep, the world is looking to Chinaas a calm port in the storm. But China has its own set of woesas clouds gather over its economy as a result of the dominoeffect from the overseas economic downturn and lingeringinflationary fears. On October 26, Zhou Xiaochuan,Governor of the People"s Bank of China, delivered a reporton the country"s current economic situation and thesafeguards that the government has put in place to fend offeconomic risks. Excerpts follow.

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