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Boao conference begins with focus on financial crisis

(Xinhua)
Updated: 2009-04-18 14:45

Related readings: Wen: Stimulus package paying off PBOC chief: IMF needs improvement 2.68M urban jobs created in Q1 China plans $10b ASEAN fund Two leaders cancel visit to Boao Tackling downturn tops bill at Boao

Boao -- The Boao Forum for Asia (BFA) Annual Conference 2009 officially opened in the scenic Boao town of south China's Hainan Province on Saturday, focusing on the role of Asian countries, especially emerging economies in this region, amid the global financial crisis.

Although Asian leaders lost a chance to discuss a prescription for the financial crisis at the ruined ASEAN summit in Thailand, the BFA undoubtedly offers a platform for political and business leaders to seek the "Asian value" in tackling the worst global economic turmoil in seven decades.

At the G20 London summit two weeks ago, voices of the emerging economies were heard by the developed countries on an unprecedented scale. However, that was far from enough. As another international convention focusing on financial crisis, the BFA Conference held from Friday to Sunday provide another opportunity for emerging Asian economies to better voice their views.

Premier Wen Jiabao delivers a keynote speech at the opening plenary meeting of the Boao Forum for Asia (BFA) Annual Conference 2009, Boao, South China's Hainan Province, April 18, 2009. [Xinhua] More Photos

Chinese Premier Wen Jiabao delivered a keynote speech, "Strengthen confidence and deepen cooperation for win-win progress", at the opening plenary meeting.

He said that the conference, with "Asia: Managing Beyond Crisis" as its theme, is a highly important one. It will contribute to the efforts to build consensus, strengthen confidence, deepen cooperation and overcome the crisis.

China's Stimulus Package Paying Off

Wen introduced the steps China has taken to cope with the severe impact of the global financial crisis, saying the country's package plan is already "paying off", and positive changes have taken place in the economy.

China's gross domestic production (GDP) rose 6.1 percent in the first quarter of this year, the slowest pace in a decade.

However, the situation is "better than expected", the premier said, citing pick-ups in investment, consumption and industrial output, as well as ample liquidity in the banking system.

He said domestic demand is boosted in a comprehensive way, industrial output has gradually stabilized, and agricultural production is on the whole stable. Economic restructuring has made encouraging progress, and urban employment has risen as 2.68 million jobs were created in the urban areas in the first quarter.

He said the stimulus policies were primarily aimed at boosting domestic demand, and at the same time made full use of external demand, to make both of them drive economic growth.

"This will lead to the transformation towards a more balanced growth pattern of the Chinese economy," he said.

Wen said the stimulus policy would give a big push to the shift from extensive economic growth driven by high consumption of material resources to intensive growth driven by scientific and technological advancement, improved quality of the workforce and institutional innovation.

"China" is a big word, said James E. Glassman, managing director and senior economist with J. P. Morgan Chase.& Co. "It symbolizes an important story in the economic universe. It underscores how much is at stake not only for the United States and China, but the global economy, and how important it is to address the global financial crisis," he said.

"We should not, however, lose sight of the fact that the international financial crisis is still spreading, the basic trend of world economic recession is not reversed, problems in the financial system remain unsolved and the worsening of the real economy has been more serious than expected," Premier Wen warned.

The global economic recovery may be a long and tortuous process, he said.

Regional Cooperation Urged

In the face of the spreading financial crisis, Wen vowed, China will continue to work with other Asian countries to actively tackle challenges and advance all-round cooperation with a view of enriching and energizing cooperation and promoting peace and prosperity in the region.

"Asia is one of the most dynamic and promising regions in the world economy. Together, we take up 60 percent of the world's population, a quarter of the global economy and a third of global trade," Wen said.

When times get rough and emerging economies strive to maintain growth, the Asian ethic of "Prosper Thy Neighbor" is an imperative, said Fidel V. Ramos, BFA chairman of board of directors and former president of Philippines.

Asian emerging economies have been galloping in the past decades. In East Asia, China achieved spectacular growth in 30 years. In South Asia, India's software and automobile industries broke into to the world market. Asia is dubbed as the engine to drive forward the world economy.

The financial stress starting from developed countries has nonetheless challenged Asian countries. Sluggish exports, shrinking investment and demand, fewer jobs and lower income plagued many emerging economies.

In its latest forecast in March, the World Bank has lowered the estimated gross domestic product (GDP) growth of 20 East Asian and Pacific developing economies this year down by 1.4 percentage points to 5.3 percent.

However, China and some Asian emerging economies will take the lead in rebounding from the economic crisis, said Long Yongtu, secretary-general of Boao Forum for Asia.

"We should make greater efforts to promote free trade and expand intra-regional trade," Wen suggested.

He called on Asian countries to strengthen financial cooperation and maintain regional financial stability.

"We should accommodate each other's concern to the greatest extent possible, build consensus and establish a regional reserve pool as early as possible so as to better protect our region from financial risks," he said.

He suggested that investment cooperation be deepened to drive regional economic growth.

China has decided to set up a 10-billion-U.S.-dollar "China-ASEAN Fund on Investment Cooperation" to support infrastructure development in the region, according to Wen.

He called on Asian countries to advance "green" cooperation and promote sustainable economic growth in the region in energy conservation, environmental protection and development and utilization of new and renewable energies, while fostering new growth areas in the Asian economy.

Have a Big Say in International Affairs

Finally, Wen said, Asia should enhance collaboration and coordination in international affairs and promote world peace, stability and prosperity.

"We should advance reform of the international financial system, increase the representation and voice of emerging markets and developing countries, strengthen surveillance of the macroeconomic policies of major reserve currency issuing economies, and develop a more diversified international monetary system," he said.

To Asia, it is more practical to take two initiatives, according to Fan Gang, a leading Chinese economist. First, in the arrangement of international system, it should encourage the existence of and competition among multi currencies. Second, it should supervise the over issue of U.S. dollar through international cooperation or the establishment of a certain consultation mechanism.

More than 1,600 political leaders, business people and academic scholars gathered in the island resort for the conference, which will conclude on Sunday.

Leaders attending the event include Iran's First Vice-President Parvis Davoodi, Myanmar's Prime Minister Thein Sein, Vietnam's Prime Minister Nguyen Tan Dung, Papua New Guinea's Prime Minister Michael Thomas Somare, Kazakh President Nursultan Nazarbayev, Pakistan's President Asif Ali Zadari, Albania's Prime Minister Sali Berisha, Mongolia's Prime Minister Sanj Bayar, and New Zealand's Prime Minister John Key.

Delegates have discussed the effect of the crisis on Asia, the steps taken by Asia to weather the challenges effectively, the role of emerging economies in reforming the global financial system, and the balance between financial regulation and innovation.

BFA was established in 2001 as a platform for high-level interaction between political and  business leaders from Asia and around the world. It is aimed at promoting the development goals of Asian countries through greater regional economic integration.