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A summit for action

(China Daily)
Updated: 2008-11-15 07:45

The stakes are high at the Group of 20 summit being held today in Washington. Without a timely, broad and concerted global response, the financial tsunami and economic slowdown the world is suffering could turn much worse than need be.

By joining other major leaders from both developed and developing countries at the summit, President Hu Jintao has driven home the key message that China is resolved to playing a responsible role within its ability in the global efforts to seek a way out of the current crisis.

As one of the largest contributors to global economic growth, China has promptly put in place monetary measures and a fiscal stimulus necessary to maintain sound and fast economic growth and thus help soften the global impact.

The People's Bank of China, the country's central bank, has cut interest rates three times within the past two months as other major central banks have worked together to prevent the global financial markets from a total freeze.

The Chinese government unveiled on Nov 9 a massive fiscal stimulus package worth 4 trillion yuan ($586 billion) to boost domestic demand.

All these efforts are definitely pertinent to the reality of the Chinese economy and the ongoing transformation of the country's growth model toward a more sustainable one. They are also a critical part of global efforts to restore confidence in the financial markets and stabilize economic growth.

The gathering of the Group of 20, which now represents nearly 90 percent of the world's gross domestic product, provides a good opportunity for leaders to figure out together the breath and depth of the financial crisis.

More importantly, by seeking an international agreement on a broad action plan, it can send reassuring signals to investors around the world that a coordinated global rescue is on the way.

It is still far too early to predict if a global recovery will happen soon given the severity of the financial crisis and its potential to further undermine growth.

It is also true that the international community has yet to reach a consensus on the reform of the financial system and its supervision, which is of long-term significance to the world's development and prosperity.

These problems will add to the difficulties for many countries to come up with a comprehensive stimulus package that the world needs to address the challenges we all face.

Nevertheless, since the world cannot afford to wait any longer in the face of the worsening financial crisis, leaders should seize the opportunity to agree on a broad plan for action.

All participants must build on the common ground among them, to lead the world onto a path out of this financial crisis.

(China Daily 11/15/2008 page4)