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Official notes more G20 effort is needed

MORE efforts should be taken to carry out the policies enacted at the G20 London Summit in early April to tackle the financial crisis, Zeng Peiyan, former Chinese vice premier, said at the Boao forum on Saturday.

"Although the participating countries agreed in principle with the consensus at the summit, the implementation will still be very difficult," said Zeng, now vice chairman of the board of directors of the Boao Forum for Asia.

The G20 Summit, according to Zeng, produced positive and practical outcomes in many aspects, however, the curtain of reforming the international financial system has just been raised, and many fundamental challenges have yet to be addressed and enormous systematic risks built up in the international financial system remain unresolved.

In addition, as countries are stepping up their bailouts, combating deflation and addressing draining liquidity, inflationary risks must not be ignored, Zeng warned.

Global market

He predicted that the world economy, which is in recession, may record negative full-year growth this year.

As the global market shrinks and unemployment rises, trade and investment protectionism are mounting, said Zeng. "The beggar-thy-neighbor approach will end up harming everyone. Instead of saving the world economy, it will, quite the contrary, worsen trade frictions and investment disputes. The world market will not prosper without a just, fair and reasonable order," he said.

Zeng urged the international community to make unremitting efforts to build a new global financial order and give developing countries greater say.

The reserve-currency countries should take up their due international responsibilities, keep their currency value stable and prevent exchange-rate war incurred by competitive devaluation, he said.

He added that Asian countries and regions should build up capacity to cushion themselves against risk and roll out stronger economic stimulus plans. In addition to relying on existing international rescue mechanisms, Asian countries should fully tap into their internal potential and make the most of regional cooperation mechanisms to jointly respond to the crisis.

China's growth slowed to 6.8 percent in the fourth quarter of last year and further declined to 6.1 percent in the first quarter of this year.


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