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.