Europe told to solve crisis itself
The euro-zone debt crisis should be solved by Europeans, and the best help China can offer is to develop its own economy in a balanced way, Liu Mingkang, former chairman of the China Banking Regulatory Commission, said yesterday.
Liu made the comments at a financial conference in Beijing, after US Treasury Secretary Timothy Geithner, speaking in Honolulu on Thursday ahead of the Asia-Pacific Economic Co-operation forum summit, urged Asia to do more to stimulate global growth to offset the crisis.
'I'm still quite optimistic about the European situation,' Liu said. 'In fact, Europeans can rescue themselves. They have the capability and political wisdom to do it.'
What China can do is maintain development of the world's second-largest economy and try to ensure social stability, Liu said at the conference hosted by the Beijing-based Caixin media group.
'The best way that China can contribute to the global economy is to do our work at home better, deepening reforms, reducing pollution and maintaining balanced economic growth,' he said.
Debt-stricken European countries have looked to China to bail them out by buying their bonds, extending loans or making direct investments in the euro zone.
However, Beijing has not announced any concrete plans to help, with President Hu Jintao saying earlier this month that Europeans should rely on themselves when addressing the debt crisis.
Huang Yiping, an economist at Barclays Capital, said direct investments may be a better choice for China than buying European government bonds, because good investment opportunities always emerge at times of crisis.
The European Union warned on Thursday that the group of 17 nations that use the euro could slip back into recession next year. The European Commission predicted the euro-zone economy will grow by just 0.5 per cent next year, much less than its earlier forecast of 1.8 per cent.
Li Yizhong, former head of the Ministry of Industry and Information Technology, said a global economic recovery would be slow. 'Developed economies may plunge into a long-term downturn, which would cripple demands for China's exports,' he said.
Hong Kong's Secretary for Financial Services and the Treasury, Professor Chan Ka-keung, said the European debt crisis had caused dramatic fluctuations in Hong Kong's financial markets and had had a negative effect on the city's exporters.
'Hong Kong's economy is facing a risk of going down,' Chan said at the Caixin conference. 'We may take relief measures to help enterprises and residents.'