The leaders of the 21 APEC nations, gathering in Singapore, have heard Chinese leader Hu Jintao advance further trade liberalization, financial reform and closer regional integration as key drivers of economic growth.
With China’s economy in the spotlight as a driver of global growth prospects while the Japanese, U.S. and EU economies remain mired in recession, Hu Jintao underlined China’s commitment to further trade liberalisation, calling for a successful conclusion to the Doha development round of trade talks and more locally, for Asia Pacific Economic Community members to ensure that APEC’s Bogor goals are implemented on time next year. The Chinese leader emphasised that China cannot survive as an isolated economy and that the world also needs China to help drive growth.
Within APEC, the Chinese President also pushed for closer economic integration to facilitate cross border trade and to boost trade, telecommunications and infrastructure development.
He also spoke of the need for concerted fiscal reforms so that the global financial system is just, inclusive and well managed, and facilitates global development.
"We should move forward reform of the international financial supervisory and regulatory system and improve the most fundamental principles and goals of supervision and regulation," Hu Jintao said.
China is under some pressure amidst calls for it to allow its currency – the Yuan – to appreciate against the U.S. dollar more than it has done. Critics say that much of China’s ability to power through a global economic downturn stems from what is seen as an artificially weak currency, and that it is also causing other nations to weaken their currencies in order to remain competitive. There have also been calls for increased restrictions to limit imports from China in some countries, as well as ongoing reservation about large scale Chinese investment in the commodities sector.
But Hu Jintao referred to his nations ability to increase credit supply and stimulate domestic demand, backed by the worlds largest foreign reserves as underpinning China’s ability to power through the downturn to such an extent that analysts are forecasting 8% GDP growth this year.
Most leaders attending the summit have agreed the worst of the downturn is past, but that there are still risks to the global economy and that it is still too early to wind back stimulus measures. The sentiment was underlined by host nation, Singapore, which is still to come out of recession. It generally busy port – one of the worlds largest – is packed with empty cargo vessels, and Marcus Hand , the Singapore based Asia Editor of Lloyd’s List DCN, says trade volumes are still well down.
“There’s been a huge drop off in world trade, it’s sort of into the region of 20 percent down,” Marcus Hand said.
Last year it cost $50,000 to charter a tanker here, now it’s just over $5,000, but there is still little demand, leading to the sight of what have become known as ‘ghost ships’ along the coast nearby.
Russia’s President, Dmitry Medvedev, will arrive in Singapore on Saturday. He will address other APEC leaders and have a personal meeting with Hu Jintao, where it is expected that Russian-Chinese energy deals will be discussed.