China has no cause to worry on US policy changes as its robust growth and current account surplus bode well for its economy. But such changes, notably the US exit from its quantitative easing regime expected later this autumn, will be felt across the world, warned Zhu Min, deputy managing director of the International Monetary Fund.

The effects of the end of QE will depend on how the US Federal Reserve executes the exit, he told a meeting of the Hong Kong Association of Banks. Ensuring financial stability is very important, but so is the timing of the exit so that it doesn't impede economic growth, he said.

Executing the exit will be a complicated task in today's "new normal" of the global economy. "Due to the 2008 economic crisis, the global economy has lost an estimated 1.5% of accumulated growth," Zhu remarked.

The pace of growth will also be lower, going forward. "The whole world had moved to another growth path. The expectations have changed," he said. The IMF has reduced its growth forecast for the global economy from 3.7% to 3.4% in 2014.

"We are in a low-interest-rate, low-growth, low-inflation and low-volatility environment. We have never seen low interest rates and low inflation coexist," the IMF official noted. This has resulted in mispricing of credit and higher levels of risk in the market.

The new normal also involves a divergence of economies. While the US economy is recovering at a moderate pace, Europe is still very weak. The divergence is reflected in policy: the European Central Bank has just announced loosening of its monetary policy which will coincide with US's tightening of its own.

In today's super-connected world, the changes in policy will be felt around the world. The emerging markets still depend on capital flow and have also experienced slower growth. This year, for the first time, they account for a greater share of the global GDP than advanced economies. They are the world's economic growth engine and the exit must be managed in a way that it will not introduce undue volatility. "Volatility would be very bad news," Zhu said.