Premier Wen answers Qs at Davos Forum

(Xinhua) Updated: 2012-09-12 10:50

BEIJING -- Following is a translation of Chinese Premier Wen Jiabao's answer to questions at the opening ceremony of the 6th Summer Davos Forum and meeting with business representatives in China's northern city of Tianjin on Tuesday:

Q: Mr. Premier, my question is about the global financial system. What is China's status in today's global financial system? How does China view international financial protectionism and China's responsibilities and obligations?

Wen Jiabao: China has been active in advocating and building a new international financial order. We have taken part in the coordination of international financial policies and formulation of financial rules through various platforms. Our goal is to promote the establishment of an open, just, orderly and inclusive international financial system. In the fight against the international financial crisis, we have done what we can in keeping with our capabilities to advance the building of the international financial system.

In order to promote the reform of the IMF structure and enhance the IMF's financial strength, we proposed in 2009 to increase IMF's financial resources. And in spite of the severe European debt issue this year, we have pledged to contribute $43 billion to the IMF.

We have taken measures to help the EU emerge from the current difficulties. We know that in the final analysis, the EU has to rely on itself to resolve the debt issue, yet we have still bought bonds of EU countries and the European Stability Fund. We are opposed to trade, investment and financial protectionism. We believe that differences and frictions in the financial field should be resolved through consultation. Only in this way can we work with unity to tide over the current difficulties.

China's financial market is increasingly linked to the international financial market. We will comply with international rules and play our role as a responsible country.

Q: Mr. Premier, the European debt crisis is far from over. How do you see the outlook of the Eurozone? What do you think is the biggest risk the world faces?

Wen Jiabao: I have full confidence in the Eurozone, yet I also have some worries. The most acute questions about the European debt issue now are whether Greece will leave the Eurozone and whether Italy and Spain will ask for and get a bailout. Three events in September have captured world attention.

First, on Sept 12, the German parliament will review Germany's bailout policy on the European debt issue. Second, also on Sept 12 , the Netherlands will have a general election and the result will affect the country's attitude on the European debt issue. And the third is the meeting of the European Central Bank (ECB). All these boil down to one thing, namely how to strike a balance between economic growth and fiscal austerity.

Europe must find the right balance, and I believe it can. Since the outbreak of the European debt issue, the EU, Eurozone countries and the ECB have taken many active measures to tackle the problem. Implementation of those measures will be a long and arduous process. Still, I have confidence in the EU.

China will firmly support EU integration and development of the Eurozone. This is because we always believe that the EU, as an independent pole in the world, should and will play an important role both politically and economically.

The difficulties the EU faces now are only temporary as the EU has a strong economy, a large pool of scientific and technological personnel and advanced managerial expertise. They form the foundation for tackling the difficulties. The European debt issue has posed many new difficulties to export-oriented enterprises in China, especially those targeting the EU market. Their market share has declined and exports have slowed down. But we believe China and the EU must join hands to tide over the difficulties.

In this sense, to help the EU emerge from the crisis is in the interest of the world and is to help ourselves. The downward economic pressure remains the biggest risk to the world. There are a lot of destabilizing factors and uncertainties in global economic and financial development. It is hard to tell how much longer this crisis will last.

Yet in all circumstances, we must have confidence. Leaders must have confidence in their own countries. Enterprises must have confidence in the market. And the people must have confidence in consumption. Only when the whole world establishes confidence can we overcome the difficulties.

During Chancellor Merkel's visit to China not long ago, besides bilateral relations, we spent much time discussing ways to strengthen cooperation in order to help resolve the European debt issue. I will soon attend the China-EU Summit in Brussels and I will further discuss with the EU leaders how to step up our cooperation.