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Exit plans depend on each country - China, Australia

Published 02/27/2010, 02:32 AM
Updated 02/27/2010, 02:36 AM

INCHEON, South Korea, Feb 27 (Reuters) - Governments need to coordinate exit strategies but the pace at which they unwind stimulus measures depends on their individual circumstances, senior officials said on Saturday on the sidelines of a G20 deputy finance ministers' meeting.

"We will continue our cooperation ... and bring growth on track as soon as possible," China's Vice Finance Minister Li Yong told reporters in Incheon, about an hour by road from the South Korean capital, at the start of the two-day meeting.

He added: "It is important they (governments) ... take appropriate macro economic policies in dealing with concerns, challenges domestically."

Li said China would continue its "proactive fiscal policy".

"And for monetary policy, we have no change. So those are two important policies within the policy framework. We will continue this policy ... Because of this appropriate macro economic policy we have 8.7 percent GDP growth.

He said it was very clear that China needed to increase domestic demand.

Beijing has started slowly pulling in the reins on loans and liquidity to stave off inflationary pressures and prevent the world's third-largest economy from overheating.

Separately, Mike Callaghan, a special envoy for the Australian prime minister on international affairs, told reporters that countries should not withdraw public support until there is stronger recovery in private sector demand.

"Sustainability depending on domestic circumstances, I think that's very important."

Earlier this month, Australia's central bank chief indicated he could raise interest rates by as much as 100 basis points in coming months. (Reporting by Cheon Jong-woo; Editing by Jonathan Thatcher)

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