Besides the financial meltdown, the leaders also discussed sustainable development, energy security and climate change yesterday. -- PHOTO: AFP
Time for new rules to guide world economy
Leaders at Asia-Europe summit also urge IMF to play critical role
By Peh Shing Huei
Beijing - Asian and European leaders ended their summit in Beijing yesterday with a call for new rules to guide the global economy while China pledged to take an 'active' role in a crucial meeting of the world's biggest economies in Washington next month.
Speaking as the host, Chinese Premier Wen Jiabao pushed for more regulation in the world's financial system even as he made a pitch for more decisive action from the developed countries.
'Developed countries should take decisive measures to stabilise financial markets so as to restore confidence,' he told a press conference at the end of the two-day Asia-Europe Summit (Asem).
'We are pleased to see that the measures taken by many countries are having preliminary effects, but they aren't enough.'
The key to a way out, said the leader of the world's fourth-largest economy, could be summed up in three words - 'confidence, cooperation and responsibility'.
'We need financial innovation, but we need financial oversight even more,' Mr Wen said, stressing that lessons must be drawn from the economic meltdown.
Mr Wen, who confirmed China's participation in the Nov 15 Washington summit, said Beijing would actively participate in a 'responsible and pragmatic' attitude.
He also promised that China would play its part, pointing to the country's 'great potential' in boosting domestic consumption, especially in the rural areas and its less developed western regions.
The Asem leaders, in a statement released late on Friday, called for the International Monetary Fund to step in and play a 'critical role'.
'Leaders pledged to undertake effective and comprehensive reform of the international monetary and financial systems,' the statement said.
'They agreed to take quickly appropriate initiatives in this respect, in consultation with all stakeholders and the relevant international financial institutions,' it added.
European Commission president Jose Manuel Barroso said participants would use the statement as the basis of their approach at the Washington summit next month, adding that he was seeing an 'emerging consensus' for 'concrete and important decisions'.
President Nicolas Sarkozy of France, which currently holds the rotating European Union presidency, said he expected concrete decisions to come out of the Washington meeting.
He emphasised that it had to address the underlying causes of the crisis, not just their effects.
He said: 'We have all understood that it will not be possible to simply meet and have a discussion. We need to turn it into a decision- making forum.'
In Washington, United States President George W. Bush said that agreeing on common principles to reform regulators would be essential to preventing another financial disaster. But in his weekly radio address, he also warned against protectionism, saying that free markets and free trade were fundamental to long-term economic growth..
The ongoing crisis has given the Asem summit rare prominence, as the biennial event has often been seen as just a talk shop with little substance.
Besides the financial meltdown, the leaders also discussed sustainable development, energy security and climate change yesterday.
Singapore Prime Minister Lee Hsien Loong, who was among the 45 leaders at the summit, met Thai Prime Minister Somchai Wongsawat before leaving Beijing for Xi'an in western Shaanxi province yesterday. It is the second leg of his five-day official visit in China.
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