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Growth, stability priorities for China at summit

By Zheng Yangpeng  (China Daily)

08:32, June 18, 2012

President Hu Jintao is greeted by a Mexican senior o cial when he arrives in the Mexican resort city of Los Cabos on Saturday for a G20 summit, which will focus on global growth and stability. [Lan Hongguang / Xinhua]

Amid increasing global economic uncertainty, economic growth and stability will be a priority for China at the G20 summit, Chinese researchers and economists have said.

"China will call on global leaders to put economic growth at the top of their agendas, particularly balanced growth," said Qu Xing, president of the China Institute of International Studies.

Chen Dongxiao, vice-president of the Shanghai Institutes for International Studies, said: "I think President Hu Jintao will stress the foremost importance of stabilizing growth, as the extent of the eurozone's sovereign debt crisis has proved much more serious than previous estimates indicated, and US economic growth remains lackluster."

China hopes the summit will buoy the confidence of European countries, and support eurozone countries in taking effective measures to overcome their difficulties, a Chinese Foreign Ministry spokesman said on Wednesday.

The summit comes at a critical time when both developed and emerging countries are losing steam.

Brazil saw growth drop sharply in the first quarter and India — after a decade of near 9 percent growth — saw its rate fall to less than 6 percent.

Qu said that although global leaders should be able to reach a consensus on key principles such as economic growth and boosting employment, a huge gap remains on the specific approaches to addressing those issues.

"Economic conditions vary from country to country. Some stress austerity, while others seek more liquidity to boost their economies. So it is very important for them to coordinate well,” Chen said.

Besides economic growth, analysts expect more pressure on the delayed reform of financial institutions.

"The 2010 Seoul summit reached an agreement on a 6 percent voting quota transfer from developed countries to developing countries in the International Monetary Fund. But since then the progress has been strained," Chen said. "We will see more pressure on the implementation issue."

Brazil has already announced it may cap its contribution to a planned funding increase for the IMF fund unless there are firm promises to give emerging markets more say at the international table.

As the world's second-largest economy, China's growth provides an anchor during this time of crisis, experts said.

China has vigorously stimulated its domestic consumption and reduced its reliance on exports, which has greatly contributed to global economic rebalancing, Qu said.

As of 2011, the share of China's trade surplus to its GDP had slumped for four consecutive years, and final consumption has contributed 51.6 percent of the GDP, statistics show.

President Hu has called for "balanced, sustainable and inclusive growth" and voiced opposition to protectionism at almost all of the previous six G20 summits.

Global leaders are expected to raise a variety of issues at the forum. Analysts believe that US President Barack Obama will probably utilize the venue in Los Cabos to press the Europeans to do more, for fear that the troubles in Europe will further drag down growth in the US and ultimately affect his chances for re-election.

German chancellor Angela Merkel, in an address to parliament before leaving for Mexico, said Europe's lingering sovereign debt crisis will likely dominate this weekend's summit.

Chen said the spotlight will likely be on the woes in the EU, as it is posing a lasting and severe threat to the world's economy.

Although markets are still deeply skeptical about the EU's ability to come up with a concrete solution, experts said people should have rational expectations.

"Whether the summit will be a success is up to how much we expect," Qu said. "There are other platforms to address the technical things. In this platform, it is important for leaders to reaffirm their stances."

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