China to talk financial cooperation with ASEAN

China to talk financial cooperation with ASEAN

KUALA LUMPUR (Agencies): China, which has long declared itself
immune to the Asian financial crisis, reversed its position
yesterday and signaled it was now ready to play a greater role in
helping end the turmoil.

Sheltered from the storm that has shaken much of East Asia,
China announced its change of tack on the sidelines of a 12-
nation East Asian summit here.

In an address to the summit, Chinese President Jiang Zemin
said it was time for the region to "intensify" economic
cooperation and "seek common ground while putting aside
differences".

"We realize that it is necessary for us to further strengthen
East Asian cooperation in order to ensure the fundamental
interests of East Asian peoples," he added.

Foreign ministry spokesman Shen Guofang admitted that China
was now "concerned" by the economic troubles dominating the
summit.

"The top priority for China at this moment is its own economic
development but China's economic development is inevitably linked
with the economic stability of Southeast Asian economies," said
Shen.

"China hopes to see the crisis end as soon as possible," he
added.

He said that China was optimistic that Asia's financial crisis
was temporary and the region would rebound on good economic
fundamentals.

"As for how temporary (it will be), it is hard to predict, but
I don't think it will be a prolonged phenomenon, because
generally speaking the economies of Southeast Asian countries are
in a fairly good shape," he said. "The financial crisis is
temporary and it is surmountable."

Leaders from China, South Korea and Japan have joined the
summit of the Association of Southeast Asian Nations (ASEAN),
creating an East Asian summit for the first time.

"I believe that China is in need of an ASEAN that is stable
and economically prospering and vice versa. ASEAN also needs a
China that is stable and experiencing economic progress," said
Shen.

The comments were in stark contrast to remarks Shen made at
the 18-nation Asia-Pacific Economic Cooperation (APEC) forum
summit in Vancouver last month.

Jiang said then that China's economic situation was
"excellent" and Shen insisted China would not be hit by the
financial turmoil in the rest of Asia.

Jiang said at the time that China would experience annual
growth of 8 percent until the end of the century and 7 percent a
year for the decade after 2000.

As the yuan is not convertible, it has not been directly
caught up in Asia's currency turbulence. By keeping the exchange
rate low, China has stimulated exports which were worth US$31.6
billion for the first nine months of the year.

The export revenue has given China a huge foreign currency
reserve estimated at $132 billion, along with one of the highest
economic growth rates in Asia.

Yesterday, Jiang attempted to lecture East Asian leaders on
how to run their economies.

"East Asian countries suffer, to varying degrees, from
irrational economic structures, imperfect financial systems,
extensive modes of growth, backward infrastructures," he said.