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SUMMIT-China's Hu urges G20 governments to boost economies

Published 03/31/2009, 09:37 PM
Updated 03/31/2009, 09:40 PM

SHANGHAI, April 1 (Reuters) - Chinese President Hu Jintao urged world governments to take appropriate steps to boost their economies as leaders of the G20 rich and emerging powers gather in London for a summit to tackle the global economic crisis.

Hu also said China's prompt moves to support its economy had born some initial fruit and the country would continue to take economy-friendly steps as part of the global effort to battle the worst financial crisis in generations.

His remarks were published in all major Chinese newspapers on Wednesday. Hu was expected to arrive in London later in the day.

The run-up to the April 2 summit has been marred by divisions between the United States and Britain on one side and European governments on the other over the right scale of fiscal stimulus needed to revive economic growth and how deeply regulatory systems need to be changed to prevent another global crisis.

China has flexed its growing economic and political muscle ahead of the meeting, most notably in a call by its central bank governor last week for a new super-sovereign reserve currency to replace the U.S. dollar.

As the global crisis drags on, Hu urged governments around the world to coordinate their economic policies while implementing stimulus measures.

"World countries should adopt economic stimulus steps suited to their conditions, reinforce coordination of their macroeconomic policies and achieve mutual development, employment and (better) livelihoods," Hu was quoted as saying in an interview with China's state-run news agency, Xinhua.

"The gathering of G20 leaders in London this time after last November's Washington summit has great significance in helping boost individual and corporate confidence, stabilising global financial markets and promoting the recovery of global economic growth," he said.

The world needs to curb trade and investment protectionism, and conduct a "necessary" overhaul of the global monetary system to prevent similar crises from emerging again in the future, Hu added.

He did not mention the recent proposal floated by central bank governor Zhou Xiaochuan and other Chinese officials to establish a new reserve currency to replace the dollar as the world's main reserve currency.

Hu also said China would continue to open its economy despite the negative impact of the global crisis, which had caused its exports and imports to dive, industrial production to slow and unemployment to rise.

China's active fiscal policy and appropriate loose monetary policy adopted after the crisis "have born initial fruit, with (the economy showing) positive signs," Hu said.

Beijing announced a crucial two-year, $586 billion economic stimulus plan last November, among other boosting steps. (For more news on the G20 summit, click on [nLA715782]) ($1=6.83 Yuan) (Reporting by Lu Jianxin; Editing by Kim Coghill)

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