China calls for "growth-friendly" fiscal consolidation in world economic recovery

17:17, June 18, 2010      

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China's fiscal risk is controllable as it aims for a balanced economy, a senior finance official said Friday in a call for "growth-friendly" fiscal consolidation of the world economy.

"According to some indicators, the fiscal risk China is facing is controllable, and China's fiscal development retains sound momentum," said Vice Finance Minister Zhu Guangyao at a news briefing on the fourth Group of 20 (G20) summit.

China's budget deficit accounted for 2.9 percent of GDP in 2009 and was expected to stand at 2.8 percent this year, said Zhu.

"Even facing healthy and sound momentum, the Chinese government attaches importance to balanced and stable economic development," said Zhu.

Fiscal consolidation would be a major topic at the Toronto summit, and the G20 leaders would discuss how to maintain robust, sustainable and balanced economic growth, said Zhu.

Some European Union (EU) member states have announced austerity plans to cut public deficits in a bid to restore investor confidence in their economies and in the euro, but the fiscal consolidation measures have drawn strong opposition.

Zhu said the global economy was undergoing gradual recovery, but still facing some uncertainties, especially with the European debt crisis.

Under the extremely complex economic situation, fiscal consolidation was needed, "but the consolidation should be conducive to healthy economic development -- that is, growth-friendly fiscal consolidation," Zhu said.

However, the issue of China's currency valuation it was not on the agenda in Toronto, said officials.

"The renminbi is China's currency, and it is not an issue for international discussion," said Vice Foreign Minister Cui Tiankai.

Cui said China has expectations from the summit, the first meeting since the institutionalization of the G20 in Pittsburgh in September last year.

Cui said China hoped the member countries would:

-- enhance communication and coordination of macro-economic policies;

-- push the International Monetary Fund (IMF) to finish its quota reform to give more representation to emerging markets and developing countries;

-- improve the international financial system and deepen the reform of the international supervision system;

-- pay more attention to development problems and provide political support to the United Nation's high-level meeting on the Millennium Development Goals in September this year;

-- and oppose trade protectionism and promote the completion of the Doha round of trade talks.


President Hu Jintao will attend the summit in Toronto on June 26 and 27 after a state visit to Canada from June 23, the first such visit by a Chinese head of state for five years.

As the two countries were marking the 40th anniversary of establishment of diplomatic ties, "the visit is a big event and is of great significance for the China-Canada relationship," said Cui.

Hu is scheduled to meet with Canadian Governor-General Michaelle Jean and Prime Minister Stephen Harper, and the two sides would sign a series of deals, said Cui.

Cui said the two countries would discuss trade, culture, education and energy issues and make some important announcements, including a new description of bilateral ties and trade targets.

China-Canada trade hit 29.7 billion U.S. dollars in 2009, and China has become Canada's second largest trade partner while Canada is China's 13th largest trade partner.

Harper made his maiden visit to China as Canadian prime minister at the end of 2009, and the two countries signed a joint statement and four cooperative documents.

Source: Xinhua


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