China concerned over safety of its assets in US
From Fazle Rashid | Sunday, 15 March 2009
NEW YORK, March 14: China has a foreign exchange reserve of $2000 billion, the largest in the world. More than 70 per cent of the $2000 billion are in dollar denominated assets. Prime Minister of China Wen Jiabao expressed concern over the safety of his country's huge US holdings.
China's concern was expressed a day ahead of the meetings of the finance ministers and central bank governors of the G20 nations which begins in London today. Government of China is alarmed by the fact that steep increase in US government spending will eventually lead to inflation and collapse of the dollar.
Larry Summers, the White House economic adviser and Robert Gibbs , the White House press secretary both allayed Chinese fear saying there is no safer investment in the world than in the US. He said boosting the economy would help reduce debt.Summer offered a strong defence of government's programmes of fiscal stimulus and financial sector restructuring. He said US must expunge the excess of fear that had held back spending and investment, a reputed paper reported today.
Wen Jaibao addressing a press conference at the end of National People's Congress did not hide his fear saying "we are concerned about the safety of our assest." "To be honest I am a little bit worried. I request the US to maintain its good credit, to honour its promises and to gurantee the safety of China's asset", the same newspaper quoted the Chinese premier as saying.
China pledged to achieve a 8.0 per cent growth rate though it will face a three per cent budget deficit due to the economic stimulus. China still remains reluctant to refurbish IMF fund despite calls to do so by US and Europe.
The G20 nations after wranglings have finally agreed to provide more fiscal stimulus to grapple with the problem of global recession. They will provide more funding to IMF.
The World Bank president Robert Zoellick warned that 2009 is shaping up to be a very dangerous year and added action is required on many fronts.
The danger is doing too little too late, he said. Any fiscal stimulus without actions to rid banks of their bad assets would be merely a sugar high providing temporary relief, a reputed paper reported today.
The International Monetary Fund (IMF) should issue 'special deposit receipts' worth $250 billion to boost its ability to help countries spend their way out of economic crisis, a reputed paper quoted Henrique Meirelles, Governor of Brazil's central bank as saying.
Brazil will support US move to shore up IMF's funding by increasing it to $250 billion. Fight against protectionism and reforming World Bank and the IMF with more voice coming from emerging nations will dominate the G20 summit set for April in London.
Another important meeting bearing far reaching consequences for the global economy will be held in Vienna today. The prospect of the price of oil increasing is worrying the world leaders. The oil producing countries outside Opec will fail to increase output. Opec which produces more than a third of world's crude is sending mixed signals about whether it intends to further reduce the output in the hope of boosting the price which has fallen from $147 barrel to just $47 a barrel.
Saudi Arabia, the only member of G20 nations is set to attack the credit crunch by using its investments fund by extending credit to companies in an effort to make up for banks' reluctance to lend to stimulate the economy.
China's concern was expressed a day ahead of the meetings of the finance ministers and central bank governors of the G20 nations which begins in London today. Government of China is alarmed by the fact that steep increase in US government spending will eventually lead to inflation and collapse of the dollar.
Larry Summers, the White House economic adviser and Robert Gibbs , the White House press secretary both allayed Chinese fear saying there is no safer investment in the world than in the US. He said boosting the economy would help reduce debt.Summer offered a strong defence of government's programmes of fiscal stimulus and financial sector restructuring. He said US must expunge the excess of fear that had held back spending and investment, a reputed paper reported today.
Wen Jaibao addressing a press conference at the end of National People's Congress did not hide his fear saying "we are concerned about the safety of our assest." "To be honest I am a little bit worried. I request the US to maintain its good credit, to honour its promises and to gurantee the safety of China's asset", the same newspaper quoted the Chinese premier as saying.
China pledged to achieve a 8.0 per cent growth rate though it will face a three per cent budget deficit due to the economic stimulus. China still remains reluctant to refurbish IMF fund despite calls to do so by US and Europe.
The G20 nations after wranglings have finally agreed to provide more fiscal stimulus to grapple with the problem of global recession. They will provide more funding to IMF.
The World Bank president Robert Zoellick warned that 2009 is shaping up to be a very dangerous year and added action is required on many fronts.
The danger is doing too little too late, he said. Any fiscal stimulus without actions to rid banks of their bad assets would be merely a sugar high providing temporary relief, a reputed paper reported today.
The International Monetary Fund (IMF) should issue 'special deposit receipts' worth $250 billion to boost its ability to help countries spend their way out of economic crisis, a reputed paper quoted Henrique Meirelles, Governor of Brazil's central bank as saying.
Brazil will support US move to shore up IMF's funding by increasing it to $250 billion. Fight against protectionism and reforming World Bank and the IMF with more voice coming from emerging nations will dominate the G20 summit set for April in London.
Another important meeting bearing far reaching consequences for the global economy will be held in Vienna today. The prospect of the price of oil increasing is worrying the world leaders. The oil producing countries outside Opec will fail to increase output. Opec which produces more than a third of world's crude is sending mixed signals about whether it intends to further reduce the output in the hope of boosting the price which has fallen from $147 barrel to just $47 a barrel.
Saudi Arabia, the only member of G20 nations is set to attack the credit crunch by using its investments fund by extending credit to companies in an effort to make up for banks' reluctance to lend to stimulate the economy.