China confident it can weather crisis, will cooperate
Written by Chang on Saturday, October 11th, 2008
China confident it can weather crisis, will cooperate
Reuters
BEIJING –– China is “fully confident and capable” it can overcome current economic difficulties and will work closely with other countries to guard the stability of the global financial system, Vice Premier Wang Qishan was quoted by state media as saying.
Wang did not elaborate on steps Beijing might take to help calm the worldwide financial storm, but his comments underline the possibility that China may yet play an important part in confronting a crisis from it has been largely sheltered because of its capital controls.
“The Chinese government is to strengthen coordination with other countries to face up to the global crisis and promote the stability of the global economic and financial market,” the official Xinhua news agency quoted Wang as telling former German Chancellor Gerhard Schroeder during a meeting.
Wang added that as the world’s biggest developing country, China’s priority was to manage its own problems well, and that the government would continue to take measures to maintain “stable and relatively fast” economic growth.
Any major slowdown in the United States and Europe would dent Chinese exports, slowing growth. Wang underlined that the domestic market still has great potential to pick up the slack.
Premier Wen Jiabao said earlier that the biggest contribution China can make in the current situation is to keep the world’s fourth-largest economy humming.
Still, speculation is swirling that Beijing could also chip in with a vote of confidence by pledging to hold onto its vast dollar assets and even buy more to help fund the massive bailout of the U.S. financial system now under way.
U.S. bonds make up the lion’s share of China’s US$1.81 trillion in foreign exchange reserves.
In another sign of increased coordination with other countries, the People’s Bank of China (PBOC) on Wednesday took the unprecedented step of acting in concert with other central banks to cut interest rates.
“We consider this a major positive as well as a sign of China’s increasing displacement of Japan as the most important economy in Asia,” Tim Condon with ING in Singapore said of the PBOC’s coordinated monetary easing.
