Beijing (AsiaNews/Agencies) – In order to better tackle the global economic crisis, emerging nations deserve more weight in global financial institutions, Chinese Foreign Minister Yang Jiechi (pictured) said in Thailand where he is attending the annual ASEAN summit. The United States and Japan are also represented at the meeting.
For China’s top diplomat changes in this direction could be on the agenda of the upcoming G20 summit scheduled for September in Pittsburgh (United States).
His proposal reiterates a demand issued by the so-called BRIC countries (Brazil, India, Russia and China) that want better representation for themselves in the International Monetary Fund as well as more lending to emerging economies hit by the collapse of private capital lending.
Also China has on several occasions called for reform of the reserve currency system, suggesting another currency of reserve be adopted that is not the US dollar to prevent problems in one country spill over into others.
Yang said he was hopeful that Asia will be first continent to climb out of the global crisis, adding that China will do its best in this process.
China’s economy has in fact shown some signs of renewed vitality, a trend welcomed by many economists. Others are wondering whether renewed high growth is a sign of a better future or simply the consequence of the government pumping money into the economy.
Indeed Wu Xiaoling, a former People's Bank of China vice governor, warned today against asset bubbles. In his opinion the economy might be picking up because of excess money supply by banks which is flowing into the stock and property markets and this, he believes, could lead to higher inflation.
At a forum organised by the National Business Daily he said that when there is excess liquidity and few investment opportunities in the real economy “funds will flow into the property market and stock market” leading to bubbles.
Hence China's central bank may have to raise banks' reserve requirements to mop up excess liquidity.
In the first half of the year Chinese banks have loaned a record 7.37 trillion yuan (US$ 1.08 trillion), almost 25 per cent of the country’s annual GDP.
This has spurred growth in the last few months, but the issue remains whether it is real or just the effect of excess liquidity, which might again stoke inflation.
Some experts in fact note that the labour market has not picked, especially in the industrial sector.
