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China's Wen calls for 'every means' against crisis

China's Wen calls for 'every means' against crisis

Chinese Premier Wen Jiabao acknowledged his country was feeling ripple effects from the global financial meltdown and pledged robust government spending to keep the economy from stalling.
While the direct impact of the crisis on China has been relatively light, the accompanying global slowdown would "inevitably have an impact on China's economy," Wen said Saturday.
"We need to use every means to prevent the financial crisis from having an impact on the growth of the real economy," he said.
Chinese institutions held relatively little of the toxic sub-prime mortgage debt hobbling Western institutions, and were as such largely unscathed by the collapse of the U.S. housing market.
However, the Chinese economy overall is slowing and will be further hit by a decline in demand for Chinese exports ranging from toys to rolled steel. Growth in the third quarter slowed to 9 percent _ down from 11.9 percent for all of 2007 _ still the fastest rate among the world's largest economies.
Wen's remarks were delivered at the close of the two-day Asia-Europe Meeting in Beijing, where leaders of 43 nations issued a statement calling for new rules to guide the global economy and on the International Monetary Fund to take a leading role to aid crisis-stricken countries.
While short on details, the statement calls on the IMF and similar institutions to help stabilize struggling banks and shore up flagging stock markets. "Leaders agreed that the IMF should play a critical role in assisting countries seriously affected by the crisis, upon their request," it said.
They also agreed to "undertake effective and comprehensive reform of the international monetary and financial systems," the statement said.
Participants said the statement would provide the basis of a joint Asian-European approach at a Nov. 15 summit on the crisis in Washington involving the world's 20 largest economies.
The document is one of the strongest endorsements yet for the Washington-based IMF, long known as the international lender of last resort, to take a leading role in the crisis.
French President Nicolas Sarkozy said the Beijing summit had raised expectations for solid results at the Washington summit.
Beijing participants "have all expressed their willingness for the Washington summit to be a place where we make some decisions, and we have all understood that it would not be possible to simply meet and have a discussion, we need to turn it into a decision-making forum," Sarkozy said.
German Chancellor Angela Merkel called for the IMF to become a "guard for the stability of the international finance system," and said there was unanimous agreement that it needed to take on a supervisory role.
The IMF, whose loans normally include strict provisions, is discussing loan packages with close to a dozen countries from Iceland to Pakistan, and is examining ways to speed up the process.
Speaking to reporters separately, Japanese Prime Minister Taro Aso suggested a stronger global agency was needed to monitor complex international financial deals and restore public confidence battered by the crisis.
"The problem is that the damage has been done and some people feel they have been taken for a ride," Aso said. "They feel this was a problem with supervision."
Asia and Europe have thus far responded rather differently to the crisis, with Europe focused overwhelmingly on propping up its financial institutions.
The 15 Eurozone countries and Britain have agreed to put up a total of $2.3 trillion in guarantees and emergency aid to help banks. Meanwhile, South Korea, China, Japan and the 10-country Association of Southeast Asian Nations have merely recommitted themselves to jointly establishing an $80 billion emergency fund to help those facing liquidity problems _ to be established by next June _ even while their stock markets tumble and export markets dry up.
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Associated Press writers Henry Sanderson in Beijing and Kwang-tae Kim in Seoul, South Korea, and researcher Bonnie Cao in Beijing contributed to this report.


Updated : 2021-05-11 19:46 GMT+08:00