Chinese premier Wen Jiabao has delivered a message to world leaders looking hopefully to China to rescue them from a double-dip recession. Get your financial affairs in order. And it might help if you moved a little faster on recognizing China as a market economy.
“Governments should fulfill their responsibilities and put their own house in order,” Mr. Wen told the opening of the summer session of the World Economic Forum, in the northeastern port city of Dalian, earlier today.
“The major developed economies should develop responsible and effective monetary policies, properly handle debt issues, ensure the stable operation of investment in the market and maintain confidence of investors around the world.”
China’s seemingly unquenchable demand for raw materials and its $3.2-trillion foreign currency reserves have turned the world’s second-largest economy into a beacon of hope for European nations struggling under heavy debt and worsening unemployment. Earlier this week, the Financial Times reported that Italy had sent a delegation to Beijing to encourage purchase of its sovereign debt. China already holds some Portuguese and Greek debt, though exact values are not known.
The BRICS nations -- Brazil, Russia, India, China and South Africa -- are to meet in Washington D.C. next week, just ahead of the Group of 20, to discuss ways to help the European Union avert further crisis as speculation mounts over a default by Greece.
Mr. Wen said Chinese policy makers will encourage domestic demand and rein in inflation through tight monetary policy to maintain a rate of growth that, while slowed, is still the envy of other nations at an expected 9 per cent this year. But he warned the global economic recovery will be “long” and “difficult.”
And, reminding his audience of his nation’s economic power, he said China is ready to invest more in Europe, but called on Europe to take “bold steps” toward recognizing China as a full market economy.
The World Trade Organization set a 2016 deadline for its member nations to recognize China’s market economy on the country’s admission to the organization in 2001. But, to China’s frustration, neither EU countries nor the United States have done so, amid continuing disputes over dumping of cheaply made Chinese consumer goods and anti-dumping tariffs in the receiving countries.
“We have been concerned about the difficulties faced by the European economy for a long time, and we have repeated our willingness to extend a helping hand and increase our investment," Mr. Wen said. “To show one’s sincerity on this issue [of the market economy] a few years ahead of that time is the way a friend treats another friend.”
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Source: Globe&Mail
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