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UPDATE 1-China offers $10 billion credit to boost Central Asia

Published 06/16/2009, 03:42 AM
Updated 06/16/2009, 03:48 AM

(Adds details)

By Chris Buckley

YEKATERINBURG, Russia, June 16 (Reuters) - Chinese President Hu Jintao on Tuesday offered Central Asian states $10 billion of credit support to help counter the global economic slump, telling a regional summit his country was on the right economic track.

"China will provide $10 billion in credit support so that the Shanghai Cooperation Organisation members can make their own efforts in countering the shock of the international financial crisis," Hu told leaders gathered in the Russian city of Yekaterinburg.

In a speech to the organisation summit, which brings together Central Asian states and neighbouring powers, Hu did not give any details of the credit offer.

Tian Qi, a Chinese Foreign Ministry official accompanying Hu, told Reuters after the speech that he had no additional details at hand.

Hu's gesture comes at a time when beleaguered economies across the region are looking to Beijing for purchases, investment and loan deals, raising hopes among some that China will lead the way in challenging U.S. economic dominance.

But Hu did not raise the proposals for diluting the dominance of the U.S. dollar that other leaders at the summit endorsed. Beijing, with its massive holdings of U.S. dollars and bonds, has been more careful about those ideas.

Hu said his country's economy was pulling through, despite the grim international scene.

"The international financial crisis continues to spread and deepen... The state of world financial developments remains grim, and many countries have fallen into economic slumps," he said.

Hu said of the growth stimulus steps taken by China: "Now these measures are showing initial results and producing positive signs."

Beijing's credit support for the Central Asian economies may come in return for greater access to oil, gas and other resources in the region to fuel China's economic growth.

Besides Russia and China, the SCO includes the ex-Soviet Central Asian republics of Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan.

(Writing by Guy Faulconbridge; Editing by Kim Coghill)

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