China backs possible IMF bond issue

March 23rd, 2009 - 7:54 pm ICT by IANS  

Barack Obama Beijing, March 23 (DPA) Chinese officials Monday said they were willing to back any issue of bonds by the International Monetary Fund (IMF) and urged the “G20″ group of major economies to give a greater say to developing nations.
“China supports the IMF’s innovative financing attempts, and a more efficient and timely financing mode can effectively ease the IMF’s cash shortage,” Hu Xiaolin, vice governor of China’s central bank, told reporters.

“If the IMF finances itself by issuing bonds, China will actively consider buying (them),” Hu said.

Reform of the Washington-based IMF to give it greater scope to bail out ailing economies is expected to be a major topic at the G20 summit in London April 1-2.

Hu and Vice Foreign Minister He Yafei reaffirmed China’s call for the G20 summit to give more help to developing nations and consolidate the fight against trade and investment protectionism.

Hu also said US Treasury bonds would remain “an important component part of China’s foreign currency reserve investments”.

China is believed to hold some $1 trillion in US government debt and Hu said his government was therefore “naturally relatively concerned with the safety and profitability of US government bonds.”

During the G20 summit, Chinese President Hu Jintao is scheduled to hold his first meeting with his US counterpart Barack Obama since the US president took office.

China expects “positive results” from the talks between Hu and Obama on the sidelines of the summit, He said.

The two leaders plan to cover range of bilateral and international issues, including cooperation in the fight against the global financial crisis, he said.

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