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China States They Can Withstand Global Financial Mess

 
China stated that its financial markets would remain stable enough to allow it help other Asian countries weather the global economic crisis,  assistance that would only enhance Beijing's increasing influence in the region.   Chinese Premier Wen Jiabao appeared to snub Western calls, however, for Beijing to help boost the International Monetary Fund's bailout pot for countries worst hit by the financial meltdown.

On Tuesday, British Prime Minister Gordon Brown called on Beijing to put up money from its enormous cash reserves of $1.9 trillion for an enhanced fund aimed at helping countries whose banking systems and currencies are being devastated by the crisis.   Wen, who was speaking to prime ministers from the Shanghai Cooperation Organization, said that ensuring the security of China's economy would be the country's most important contribution toward global financial stability. The organization is a security grouping dominated by Moscow and Beijing that also includes the four Central Asian countries of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

"It is necessary to exercise greater interaction between our financial and business communities," Wen said. "SCO members must work ... to enhance the coordination of monetary policies and improve financial controls to prevent and neutralize financial risks."

China sits on the world's largest cash reserves, giving it significant clout in the energy-rich Central Asia and Caspian Sea region, which is believed to contain the world's third-largest energy reserves.   Russia and China have used SCO to try to keep the West out of Central Asia, but they also compete with each other for regional dominance. The Kremlin's hand has been weakened by the financial crisis, which has ravaged Russian markets and put some of the nation's top companies in trouble.

At Thursday's meeting, Wen said China would consider issuing loans and aid to members of the organization to ensure food security and support joint economic projects in the region.

"Because of the increasing relevance of food security, China stands ready to assist SCO member organizations in the establishment of important technical facilities for agriculture," Wen said.

Food prices across the region have soared drastically over the past year as a result of increasing energy costs and disappointing grain harvests. Impoverished Tajikistan has been worst hit.  The global crisis has also prompted Moscow to ask China for loans to help top Russian energy companies pay their obligations to global lenders. The loans-for-shares deal currently being negotiated would oblige Russia to supply 15 million tons of oil a year to China in 2011-2030 in exchange for $25 billion in loans to the state controlled Rosneft oil company and Transneft pipeline operator, Russian news reports said.

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