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You're reading: China, Russia sound alarm on world economy at APEC summit

VLADIVOSTOK, Russia - China and Russia sounded the alarm about the state of the global economy at a summit on Saturday and urged Asian-Pacific countries to protect themselves by forging deeper regional economic ties.

Chinese President Hu Jintao said Beijing would do all it
could to strengthen the 21-member Asia-Pacific Economic
Cooperation (APEC) and boost prospects of a global recovery by
rebalancing its economy, Asia’s biggest.

Russian President Vladimir Putin said trade barriers must be
smashed down. He is hosting the event on a small island linked
to the Pacific port of Vladivostok by a spectacular new bridge,
a symbol of Moscow’s pivotal turn to Asia away from
debt-stricken Europe.

“It’s important to build bridges, not walls. We must
continue striving for greater integration,” Putin told APEC
leaders seated at a round table in a room with a view of the $1
billion cable-stayed bridge, the largest of its kind.

“The global economic recovery is faltering. We can overcome
the negative trends only by increasing the volume of trade in
goods and services and enhancing the flow of capital.”

China’s Hu told business leaders before the summit the world
economy was being hampered by “destabilising factors and
uncertainties” and the crisis that hit in 2008-09 was far from
over. Beijing would play its role, he said, in strengthening the
recovery.

“We will work to maintain the balance between keeping steady
and robust growth, adjusting the economic structure and managing
inflation expectations,” he said.

Hu spelled out plans for China, whose economic growth has
slowed as Europe’s debt crisis worsened, to pump $157 billion
into infrastructure investments in agriculture, energy, railways
and roads. Hu, who steps down as China’s leader in the autumn
after a Communist Party congress, promised continuity and
stability for the economy.

Putin, who has just begun a new six-year term as president,
said on Friday Russia would be a stable energy supplier and a
gateway to Europe for Asian countries, and also pledged to
develop his country’s transportation network.

Gazprom, Russia’s state-controlled gas export
monopoly, signed an agreement with Japan to develop plans for a
$7 billion liquefied natural gas plant on Russia’s Pacific
coast, underscoring Moscow’s eastward shift.

RUSSIA LOOKS EAST

The relative strength of China’s economy, by far the largest
in Asia and second in the world to the United States, is key to
Russia’s decision to look to the Pacific Rim as it seeks to
develop its economy and Europe battles economic problems.

APEC, which includes the United States, Japan, South Korea,
Indonesia and Canada, groups countries which account for 40
percent of the world’s population, 54 percent of its economic
output and 44 percent of trade.

APEC members are broadly showing relatively strong growth,
but boosting trade and growth is vital for the group as it tries
to remove the trade barriers that hinder investment.

“It is absolutely clear that the most important region for
economic growth this decade – and probably the next decade –
will be the Pacific,” said Mexican President Felipe Calderon.

The European Union has been at odds with both China and
Russia over trade practices it regards as limiting free
competition. Cooperation in APEC is also hindered by territorial
and other disputes among some of the members.

Putin, 59, limped slightly as he greeted leaders at the
summit. Aides said he had merely pulled a muscle. Underlining
Putin’s good health, a spokesman said he had a “very active
lifestyle.”

Discussions at the two-day meeting focused on food security
and trade liberalisation. An agreement was reached before the
summit to slash import duties on technologies that can promote
economic growth without endangering the environment.

Breakthroughs are not expected on other trade issues at the
meeting, from which U.S. President Barack Obama is absent. He
has been attending the Democratic Party convention and
Washington is represented by Secretary of State Hillary Clinton.

Clinton said after talks with Foreign Minister Sergei Lavrov
that the U.S. government was working with Congress to pass
legislation needed to upgrade trade ties with Russia, which
recently joined the World Trade Organisation.

Tensions persisted between the two former Cold War foes over
Iran and Syria, however, and Clinton had only a short meeting
with Putin late on day one of the summit, which culminated in a
lavish firework show over Vladivostok’s harbour that was
reported in the Russian media to have cost nearly $10 million.

Also missing the summit was Australian Prime Minister Julia
Gillard, who went home after learning her father had died.

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