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Hu, Obama to confer at G20 crisis summit

PRESIDENT Hu Jintao will hold his first meeting with US President Barack Obama during the G20 London Summit on April 2, a session that will focus on reducing trade protectionism as the world's top economies try to forge a coordinated response to the global downturn.

The two leaders will discuss a wide range of issues, including the Sino-US relationship and how to tackle the international financial crisis, He Yafei, China's vice foreign minister, said at a briefing in Beijing yesterday.

Hu will also meet other state leaders, including British Prime Minister Gordon Brown, Russian President Dmitry Medvedev and Australian Prime Minister Kevin Rudd during the summit of the Group of 20 nations.

China is a rare major economy that is still growing despite the "Great Recession," as the IMF calls the first decrease in the global economy since World War II. Countries such as Britain and Japan are forecast to suffer prolonged recession.

China is working to achieve an economic growth of 8 percent this year after posting a 9-percent increase in 2008.

The country is expected to support the world economy with its own growth and to use its foreign exchange reserves to buy foreign assets such as the US Treasury bonds.

China is calling on the G20, representing countries that account for more than 80 percent of the world's economy, to send a strong signal opposing protectionism, Vice Finance Minister Li Yong told the same briefing in Beijing.

Summit organizers hope to agree on action to stabilize financial markets, reform and strengthen the global financial and economic system and put the global economy on track for sustainable growth.

Britain's Brown said earlier that the theme of the G20 London Summit "is that global problems need global answers and global means of acting."

But a rift is already developing between Europe and the United States as Washington's idea for another coordinated fiscal stimulus to lift the world out of recession is being resisted by Germany and France.

At the same Beijing briefing, Hu Xiaolian, deputy governor of the People's Bank of China, said China will consider buying International Monetary Fund bonds if the agency decides to issue them to raise capital for the first time in its history.

"China supports the IMF's innovative financing attempts, and a more efficient and timely financing mode can effectively ease the IMF's cash shortage," Hu said.

"If the IMF finances itself by issuing bonds, China will actively consider buying" those bonds, she said.

Hu also said China will continue buying US government debt while paying close attention to possible fluctuations in the value of those assets. Investing in US Treasury bills is "an important component part of China's foreign currency reserve investments," she said.

"So as an important component, we are naturally relatively concerned with the safety and profitability of US government bonds," Hu told reporters - a statement apparently aimed at concerns that rising debt to fund Washington's stimulus package could spur inflation and weaken the dollar.

China is America's biggest foreign creditor, holding an estimated US$1 trillion in US government debt. A weaker dollar would erode the value of those assets.

Hu's comments follow remarks earlier this month by Chinese Premier Wen Jiabao that he was "a little bit worried" about China's holdings of US government debt.


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