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Hu calls for balanced global economic growth

Updated: 2010-06-28 10:12
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TORONTO - Chinese President Hu Jintao laid out on Sunday a three-point proposal for promoting a strong, sustainable and balanced global economic growth.

While addressing the fourth G20 summit in Toronto, President Hu said in his speech titled "Work in unity for the future" that the world economy is gradually recovering with the help of the concerted efforts of G20 members and the entire international community.

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However, he also warned that the recovery was unfirmly established, unbalanced, and still facing "quite many uncertainties," such as the expanding sovereign debt crisis, drastic exchange rates fluctuations of major currencies and persistent volatility in the international financial markets.

"All this shows that the deeper impact of the international financial crisis is yet to be overcome and systemic and structural risks in the world economy remain very serious," he said.

Seeking to address these problems and materialize a strong and balanced growth worldwide, the president laid out a three-point proposal.

"First, we need to turn the G20 from an effective mechanism to counter the international financial crisis to a premier platform for advancing international economic cooperation," said the president.

Hu further elaborated on his expectations for a function-adjusted G20 framework.

"The complex world economic situation makes it necessary for the G20 to play a guiding role. We need to take a longer-term perspective and shift the focus of the G20 from coordinating stimulus measures to coordinating growth, from addressing short-term contingencies to promoting long-term governance and from passive response to proactive planning," he said.

He said that the G20 must act in a "cautious and appropriate" way concerning the timing, pace and intensity of an exit from the stimulus packages and consolidate the momentum of the world economic recovery.

The Chinese leader said G20 nations should strengthen coordination of macroeconomic policies among them, support countries hit by the sovereign debt crisis in overcoming the current difficulties.

He called for well managing the G20's relationship with other international organizations and multilateral mechanisms and ensuring that the G20 "plays a core role in promoting international economic cooperation and global economic governance."

Secondly, the Chinese leader said "we need to accelerate the establishment of a new international financial order that is fair, equitable, inclusive and well-managed."

"We must learn the hard lessons of the international financial crisis, take effective measures to address the root causes of the crisis and push forward reform to ensure that the future international financial supervisory and regulatory regime is easy to operate and highly accountable," he said.

He called for the establishment of an international financial system "that is good for the growth of the real economy."

Hu said the G20 members need to bring the shadow banking system under supervision and regulation and formulate globally consistent accounting rules.

The regulation of credit rating agencies should be enhanced, he said, adding that "it is particularly important to establish objective, fair, reasonable and uniform methodologies and standards for sovereign credit rating so that the rating results can accurately reflect the state of a country's economy and credit worthiness."

He also said the G20 nations need to enhance the IMF's capacity building and surveillance reform, and strengthen supervision over macroeconomic policies of various parties, particularly major reserve currency issuing economies.

Thirdly, the Chinese leader urges advancing "the building of an open and free global trading regime."

"We must take concrete actions to reject all forms of protectionism and unequivocally advocate and support free trade," he said.

Calling for renewing commitment not to impose new restrictions on goods, investment and services, he said the developed countries should promote international trade "with greater openness."

"It is important to address trade frictions appropriately through dialogue and consultation and under the principle of mutual benefit and common development," he stressed.

The Chinese president called on G20 countries to work for comprehensive and balanced outcomes from the Doha round trade negotiations and attain the goals of this development round at an early date.