China backs global efforts on financial crisis

AP News
Posted: Aug 09, 2011 1:38 PM
China backs global efforts on financial crisis

China's Cabinet on Tuesday issued strong support for the latest global efforts to handle financial uncertainty and urged continued effort to reduce fiscal deficits.

China affirms recent statements from finance ministers and central bank governors of the G-20 countries on stabilizing financial markets, the State Council announced following a meeting presided over by Premier Wen Jiabao.

"China calls on relevant countries to adopt responsible fiscal and monetary policies, reduce fiscal deficits, appropriately deal with debt issues, and maintain investment security and stable operation of markets to retain the trust of global investors," the official Xinhua News Agency quoted the State Council statement as saying.

The statement offered a more positive tone than recent reports in official media that have accused Western governments of ducking their responsibilities and undermining the global economy by failing to live within their means. China has called the debate over raising the U.S. debt ceiling a sign of political crisis in Washington and said overspending on foreign military adventures was to blame for much of America's current financial woes.

China, the world's second-largest economy, China owns $1.2 trillion of U.S. Treasury debt, the largest holding by any country. However, Standard and Poor's downgrade of the U.S. credit rating is unlikely to be a deterent.

Beijing is trying to rein in economic growth that surged to 9.5 percent in the quarter that ended in June just as the United States, Japan and other governments are struggling to shore up their lagging economies.

Inflation has climbed steadily despite five interest rate hikes since October 2010 and government curbs on lending and investment. Analysts expected it to peak by midyear and then decline, but prices for pork and vegetables spiked up after summer floods wrecked crops in China's south and east.