China’ Premier Wen Jiabao urged nations to work together to stabilize turbulent financial markets on Tuesday as global stocks swooned on fears the world economy is headed for a downturn.
Speaking after a regular meeting by the Chinese cabinet, Wen alluded to debt problems in the United States and Europe and called on “relevant” countries to implement responsible monetary policy and rein in fiscal deficits.
His remarks marked the first public comment from Beijing on the rout in global markets in the past week following a downgrade of the U.S. sovereign credit rating and Europe’ worsening debt crisis.
In a sign that China may soften its policy stance in the face of mounting uncertainties, Wen toned down his inflation rhetoric by omitting Beijing’ usual refrain that fighting inflation would be a priority. Instead, Wen said Beijing’ economic policies have shown positive results and need to balance price and growth risks.
“We urged relevant countries to take responsible monetary and fiscal policies to cut fiscal deficits and properly manage the debt crisis, to ensure a stable performance of global markets and maintain investor confidence,” he was quoted as saying on state radio.
“The global community should improve the communication and coordination of their macro economic policies to realize sustainable, stable and balanced growth in the world economy.”
“Currently, global financial markets are highly turbulent and uncertainties are marring a world economic recovery,” he said.
Wen said China’ economy was still growing solidly, but noted the need to guard against rising risks from choppy markets and cloudy growth outlooks.
Unlike two other occasions in July when Wen stressed that China’ policy priority was still focused on taming inflation, Wen only said on Tuesday that Beijing should “try its best to curb price rises.”
“We should try our best to curb price rises and maintain steady and relatively fast economic growth,” he said. “We should properly handle the balance between managing inflationary pressures, maintaining economic growth and adjusting the economic structure.” Wen’ remarks came just hours Chinese data showed inflation hugging a three-year high of 6.5 percent in July as growth in factory output cooled to 14 percent. “So far, China’ economy continues to maintain the good growth momentum and the macro economic policies are showing positive effect.”
Fears the global economy may slip into another recession after the United States suffered a debt rating downgrade and as Europe reels from a debt crisis pummeled world stocks for the 10th day running on Tuesday. Wen said he welcomed the Group of 20 nations’ vow on Monday to do all that is needed to keep financial markets stable and the world economy growing.