Global economic outlook still grim

Updated: 2011-11-21 13:37


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CHENGDU, China - Chinese Vice-Premier Wang Qishan warned on Monday that the global economy remains in a grim state and that an "unbalanced recovery" might be the best option.

The warning, made at the annual US-China Joint Commission on Commerce and Trade, or JCCT, in the southwest Chinese city of Chengdu, echoed Wang's comments over the weekend that a long-term global recession was certain and China must focus on its domestic problems.  

Policymakers globally are expressing increasing alarm at the risks facing the world economy, mainly stemming from financial contagion in Europe. Several central banks, including those in the euro zone, Australia, Brazil and Indonesia, have cut official interest rates to support their economies.

"Global economic conditions remain grim, and ensuring economic recovery is the overriding priority," said Wang, the top official steering China's financial and trade policy, at the start of the second day of talks.

Wang also said that China and the United States should work together to achieve balanced economic growth.

But his comments also suggested that Beijing should attend to bolstering China's own growth before it worried about global imbalances.

"An unbalanced recovery would be better than a balanced recession," he said.

"As major world economies, China and the United States would make a positive contribution to the world through their own steady development," Wang told dozens of trade, investment, energy and agricultural officials from each government seated in a conference hall.

"China is willing to develop even closer and broader economic cooperation with the United States," said Wang.

China's growth is slowing - down to 9.1 percent in the third quarter from 9.5 percent in the second-quarter and 9.7 percent in the first quarter, but the rate remains within the government's comfort zone.

The central bank has loosened its grip on bank credit in a bid to support the cash-starved small firms and pledged to fine-tune policy if needed.

The US Secretary of Commerce John Bryson told the talks that his government welcomed more expanded trade and investment, on balanced terms.

"But a reality also is that many in the US, including the business community and the Congress are moving towards a more negative view of our trading relationship, and they question whether the JCCT is able to make meaningful progress," said Bryson.

The first day of the two-day talks "did not make as much we need to," said Bryson. "It is time to work hard and deliver results," he added.

The outcomes of this session of the JCCT talks will be announced in the afternoon local time.