Confidence for sharing

(China Daily)
Updated: 2009-03-14 15:36

Premier Wen Jiabao's assurance that extra stimuli are already in the pipeline should give a huge boost to the confidence of not only the Chinese people but also international investors, who are hoping for a speedy recovery of China's economy.

With plenty of "ammunition" reserved, China is fully prepared to launch new economic stimulus policies at any time to handle greater difficulties.

This certainly adds to our confidence to revive the national economy, in spite of the global economic crisis.

For international investors, who were once disappointed due to misunderstandings about China's stimulus package, they can now take comfort from Premier Wen's message delivered yesterday after the annual parliament session.

A sober-minded Chinese government that is ready to cope with an even worse scenario of the financial crisis and economic meltdown, in itself, is crucial to any possible early recovery of the world's third largest economy.

And the importance of China's stable and relatively fast economic growth to the global market can hardly be overvalued at a time when all the major developed economies are struggling with the worst recession in many decades.

However, while sharing the strong confidence China is building among its people to fight downturn, the international community should also pay close attention to its suggestion on a possible solution to the current financial crisis.

In view of the urgency and severity of the challenge that lies ahead, any attempt to establish new international institutions to address the long-term issue of global governance will appear far-fetched.

Yet, if existing international organizations are to play a central role in coordinating an adequate global response to the ongoing financial crisis, they must undergo necessary reforms to reflect the new global reality.

For instance, a large increase in the resources of the International Monetary Fund (IMF) was widely regarded critical to helping prevent the spread of the crisis across the globe. But to increase the Fund's capital was not up to a single country.

"We advocate that IMF member countries should shoulder responsibilities in accordance with their quotas," said Premier Wen, when asked whether China could boost its contribution to this international organization.

Clearly, balanced rights and obligations are a precondition for any international institution to effectively mobilize its members for common purpose.

Unfortunately, the current quotas, which the IMF set, still mirrors an outdated past. Piecemeal reforms are simply not enough given the scale of the current challenges.

Only when the Fund is reformed promptly to represent the reality can it timely adapt itself to the new task. Then, the emergence of a well-functioning IMF will considerably shore up our confidence to fight the global downturn.

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