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Top Chinese official criticizes rich countries over crisis
Washington (AFP) Oct 11, 2008 A top Chinese official criticized rich nations for the problems in the global financial system on Saturday and called on them to "shoulder the responsibility" of preventing more fallout. Yi Gang, number two in China's central bank, also urged the International Monetary Fund (IMF) to increase its surveillance of developed nations where he said "weak financial policy discipline" was the cause of problems. "The major reserve currency-issuing countries should shoulder the responsibility for preventing further spillovers and minimizing shocks to other countries," the deputy governor of the People's Bank of China told a meeting of the IMF. The US and eurozone are by far the largest currency reserve-issuing countries in addition to Switzerland, Japan and Britain. "Under the current international monetary system, the lack of effective surveillance of reserve currency-issuing countries and their weak financial policy discipline has resulted in excess global liquidity and disorderly capital flows," Yi said in a statement. He said this had caused difficulties for other countries in their bid to preserve macroeconomic stability and boost growth "while posing serious risks for global economic and financial stability. "The Fund (IMF) must draw lessons from the crisis and take corrective measures to enhance its surveillance over the developed countries, especially the reserve currency-issuing countries," he told the IMF's International Monetary and Financial Committee. China has the biggest foreign exchange reserves in the world of nearly two trillion dollars. Official figures showed the country held 1.8088 trillion dollars at the end of June. Its double-digit economic growth is also highly dependent on exports to the United States and the eurozone and Yi pointed to a "much worse than expected" impact of the financial crisis on the real economy. "The deepening and widening of the US financial crisis has triggered a major global slowdown and escalating uncertainty," Yi said. He called on rich nations to implement "bailout packages" for their ailing banks quickly. "It is imperative that the major advanced economies coordinate rapid implementation of bailout packages to avoid deflation and facilities the global recovery," he said. The finance chiefs of the Group of Seven major advanced economies announced Friday a broad five-point action plan to tackle the global financial crisis, which has caused stock markets to crash amid a credit crunch. The G7 pledged to use "all available tools" to support key institutions and prevent their failure in the worst financial crisis since the 1930s Great Depression. Community Email This Article Comment On This Article Share This Article With Planet Earth
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Washington (AFP) Oct 8, 2008China's currency remains "substantially undervalued", the International Monetary Fund said Wednesday, arguing that greater exchange rate flexibility would benefit the Asian giant. |
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