China's financial system 'sound and safe' : Wen

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NANNING, Oct 6 (Xinhua): Chinese Premier Wen Jiabao said here yesterday that China's financial institutions have generally increased their strength, profitability and risk-resisting ability, and the financial system as a whole is sound and safe in face of the international financial crisis.
Wen made the remarks during an inspection tour to Guangxi Zhuang autonomous region in southwest China.
He said that the world economic situation has had dramatic changes this year, the United States' subprime crisis has been deteriorating and is having an increasingly serious negative impact on the world's financial market and the world economy as a whole.
Under multiple negative factors, both international and domestic, China has reacted actively and properly, made efforts to improve the predictability, pertinence and flexibility of macro-economic control policies, and timely solved outstanding problems in economic development.
As a result, the country's economy has maintained its momentum of smooth and rapid development, Wen said.
Generally speaking, China's economic foundations have not changed and the economy is developing towards the preset macro control targets, said the Premier. "We have full confidence in China's economic development and financial stability," Wen said, stressing that the most important thing is to do our own business well, maintain the stability of the economy and the financial and capital markets.
AFP adds: China can help bring global stability amid the financial crisis and western governments should encourage its integration into the global system, Australian Prime Minister Kevin Rudd said.
Rudd, a Mandarin-speaking former diplomat to Beijing, said China's extraordinary growth was a key driver of global growth and the Asian superpower had been a stabilising force during the Asian financial crisis of 1997.
With global markets in turmoil due to the credit crunch and many financial institutions in the United States and Europe in trouble, Rudd said China-as well as other economies such as Japan and Korea-could help strengthen global financial stability.
"Chinese institutions have the liquidity to take stakes in those US and European institutions," the prime minister told a weekend business forum in a speech made public late Sunday.
Rudd said China was already playing an increasing role in global financial markets, with its institutions estimated to hold some 500 billion US dollars worth of US treasury bonds and 200 million dollars in US asset-backed securities by mid-2008.
"The current instabilities that are concentrated in the US should not be taken as a signal to China to retreat from integration and globalisation," he said.
Australia, along with other nations, must continue to encourage China to play a positive role in the global economy, the centre-left Labour Party prime minister said.
"It is important now for western nations to demonstrate our positive support for China as a responsible stakeholder in the global economy and in major financial institutions," he said.