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BEIJING, July 1 (Xinhua) -- Chinese Premier Wen Jiabao called for attention to "institutional and management loopholes" discovered in the auditing of central government budget in 2008 here Wednesday. Wen made the comment at the executive meeting of the State Council, China's Cabinet. All related authorities should take more effective measures to correct these problems, including revising the budget law, strengthening the monitoring and supervision of the new investment projects of the central government, and enhancing transparency in government affairs, Wen said. He also called for establishment of accountability mechanism and building of effective monitoring, alarm, emergency system directing at major economic risks. The correction result should be reported to the State Council by the end of October, Wen said. Wen also said that the execution and management of the central budget had made substantial improvement in general, and highlighted the importance of audit supervision. The meeting also approved plans to develop the coastal economic belt in northeastern Liaoning Province in an effort to rejuvenate the traditional industrial base. The zone comprises coastal cities of Dalian, Dandong, Jinzhou, Yingkou, Panjin and Huludao, which opened navigation services to more than 140 countries and regions. The economic zone should work to boost the opening up of northeast China, promote the shipping and logistics services, and push for the development of advanced manufacturing in the area.
BEIJING, June 2 (Xinhua) -- The China Investment Corporation (CIC), the country's sovereign wealth fund, announced Tuesday that it decided to buy 1.2 billion U.S. dollar common stocks in Morgan Stanley's 2.2-billion-U.S.-dollar common stock offering. Morgan Stanley announced Tuesday it had priced a public offering of common equity of 2.2 billion U.S. dollars. The proceeds are intended to fully redeem the preferred capital of the Troubled Asset Relief Program (TARP) before the end of June. The TARP is a program of the United States government to purchase assets and equity from financial institutions in order to strengthen its financial sector. It is the largest component of the U.S. government's measures in 2008 to address the subprime mortgage crisis. Morgan Stanley notified the CIC of the offering in light of its healthy business relationship with CIC and the preemptive rights CIC holds. CIC plans to participate in this offering, according toa notice on its Web site. CIC was optimistic in Morgan Stanley's future development as "Morgan Stanley is widely expected to be able to leverage on its strengthened financial position and will be on the road of resuming its successful trajectory amid the dramatic restructuring of the international financial services industry". On December 19, 2007, CIC purchased 5.6 billion U.S. dollars mandatory convertible securities into Morgan Stanley common stock, representing approximately 9.86 percent equity ownership in Morgan Stanley. However, after Mitsubishi UFJ Financial Group, Inc.'s investment in Morgan Stanley in October 2008, CIC's equity ownership was diluted to approximately 7.68 percent. This new purchase would bring CIC's equity ownership in Morgan Stanley back to approximately 9.86 percent, effectively reducing CIC's overall cost basis and increasing the returns potential, said CIC. According to a statement posted on Morgan Stanley Web site Tuesday, it has priced a public offering of approximately 80.2 million shares of common stock to the public at 27.44 dollars per share. CIC has agreed to purchase 44.7 million shares of common stock at the public offering price while the Mitsubishi UFJ Financial Group, Inc. has agreed to buy 16 million shares, the Morgan Stanley statement said.

BEIJING, May 17 -- Shanghai will step up efforts to lure more talent, beef up development of its legal system and improve its credit database as part of efforts to develop a global financial center, Vice Mayor Tu Guangshao said Saturday. The city will also enable financial markets and institutions to play an important role in financial innovation and make the Pudong New Area a pioneer for financial reforms, Tu told the Lujiazui Forum in Shanghai. "To realize our goals, we need a combination of forces," said Tu. "We need guidance and support from the central government in terms of rules' drafting and coordination. We also need financial markets and companies to make contributions." From left: Xu Xiaonian, professor of CEIBS, Hu Zuliu, chairman of Goldman Sachs China, Xie Guozhong, board member of Rosetta Stone Advisors, Ha Jiming, chief economist of China International Capital Corp and Wang Qing, chief economist of Morgan Stanley China discuss issues at the Lujiazui Forum Saturday Shanghai must have "breakthrough and innovation" in its measures to attract financial talents, the most important element in building the city into an international financial hub, Tu said. The city should also have a solid financial legal system and the municipal government is working to improve the arbitrary, hearing and verdict processes of financial cases, according to Tu. He added that local government will cooperate with the People's Bank of China to improve the city's credit environment. One focus will be the establishment of a credit ratings system for small- and medium-sized enterprises to facilitate fundraising, Tu said. Xu Lin, Party Secretary of Pudong New Area, told the forum the district will shore up its preparation for financial innovation, including establishing an over-the-counter equity exchange for start-up technology firms. Pudong will also trial programs to settle cross-border trade using the yuan and to set up consumer finance companies to fund people's purchases of durables such as home appliances and electronics. Xu also noted that Pudong will fast track the development of financial services for the shipping industry as China pursues building Shanghai into an international financial and shipping hub by 2020. "The district will encourage capital from various sources to help innovation and upgrade industry," Xu said. "More credit support will be given to small companies in terms of innovation." Financial experts attending the two-day Lujiazui Forum, which ended Saturday, called on the city to take more measures to retain talent and financial institutions. "The major European and US markets are reshuffling after the crisis and it has created a good opportunity for Shanghai to lay a sound basis and infrastructure for rising as an international financial center," said Laura Cha, deputy chairman of the Hongkong and Shanghai Banking Corp. "We should learn lessons from them and avoid the mistakes they have made." Shanghai is still lagging behind in terms of financial talent both in quality and quantity, she added. She suggested shoring up the city's financial high education sector and rotating financial talents to develop more overseas experience.
BEIJING, June 23 (Xinhua) -- State President and Communist Party of China (CPC) Central Committee General Secretary Hu Jintao urged all Chinese people Tuesday to remember and study the morals and demeandour of former state president Li Xiannian (1909-1992). Li won respect and love from the CPC, People's Liberation Army and people for his contribution to China's independence and the Chinese people's emancipation, China's socialist revolution, construction, reform and opening-up drive, and the building of the country into a modernized socialist nation that is prosperous, powerful, democratic and civilized, Hu said at a memorial meeting to mark Li's 100th birthday. Chinese President and Communist Party of China (CPC) Central Committee General Secretary Hu Jintao speaks at a memorial meeting to mark the 100th birthday of former state president Li Xiannian (1909-1992), in Beijing, China, June 23, 2009.Hu called Li a "great proletarian revolutionary, statesman, strategist and a staunch Marxist and outstanding Party and State leader." Other state and CPC leaders attending the memorial service included Wu Bangguo, Wen Jiabao, Jia Qinglin, Li Changchun, Xi Jinping, Li Keqiang, and Zhou Yongkang. Jia presided over the gathering. Hu spoke highly of Li's prominent role in different periods of the CPC-led Chinese revolution, including the armed revolution of the 1920s-40s, the early development of New China in the 1950s-70s,and the epochal reform and opening-up drive launched in the late 1970s. Li was born into a poor peasant family on June 23, 1909, in Huang'an, Hubei Province, central China. He took part in the CPC-led Peasants' Movement and joined the Party in the 1920s. In 1927, Li led a group of peasants to join in the Huangma Uprising. Later, he became a member of the CPC-led Chinese Workers' and Peasants' Red Army and played an important role in strategic battles and maneuvers of the Red Army. During the Long March, Li supported Zhu De and other senior leaders in resolute struggle against the splittist activities of Zhang Guotao. In China's War of Resistance Against Japanese Aggression (1937-45) and the Liberation War (1946-49) against the Kuomintang Regime, Li became a ranking officer in the CPC-led armed forces and fought a large number of major battles and established several revolutionary bases. After 1949, the year the People's Republic of China was founded, Li served as vice premier for 26 years and played a big role in managing the economy. He was wrongly criticized and persecuted during the Cultural Revolution (1966-1976). Starting in the late 1970s, as a core member of the second-generation of CPC leadership headed by Deng Xiaoping, Li assisted Deng in ushering in and carrying on the reform and opening-up drive. In his final years in service, Li held top-level Party and state roles, including vice chairman of the CPC Central Committee, a Standing Committee member of the Political bureau of the CPC Central Committee, state president, and chairman of the National Committee of the Chinese People's Political Consultative Conference.
WASHINGTON, April 22 (Xinhua) -- The International Monetary Fund on Wednesday warned that the global economy was in "a severe recession" and the world output is projected to decline 1.3 percent this year, the deepest global recession since the Great Depression in 1930s. "The global economy is in a severe recession inflicted by a massive financial crisis and acute loss of confidence," said the IMF in its latest World Economic Outlook report. "All corners of the globe are being affected." EPICENTER OF CRISIS According to the report, the world economy is projected to decline by 1.3 percent in 2009 as a whole and to recover only gradually in 2010, growing by 1.9 percent. "Achieving this turnaround will depend on stepping up efforts to heal the financial sector, while continuing to support demand with monetary and fiscal easing," said the IMF. The advanced economies experienced an unprecedented 7.5 percent decline in real GDP during the fourth quarter of 2008, and output is estimated to have continued to fall almost as fast during the first quarter of 2009, according to the report. Although the U.S. economy may have suffered most from intensified financial strains and the continued fall in the housing sector, western Europe and advanced Asia have been hit hard by the collapse in global trade, as well as by rising financial problems of their own and housing corrections in some national markets. Emerging economies are suffering badly and contracted 4 percent in the fourth quarter in the aggregate. The United States, at the center of an intensifying global financial storm, will contract by 2.8 percent this year, said the IMF, adding that "the biggest financial crisis since the Great Depression has pushed the United States into a severe recession." Meanwhile, the euro zone economy will shrink by 4.2 percent this year and fall a further 0.4 percent in 2010, the IMF said, criticizing the bloc for weak public policy responses and coordination. In Japan, the IMF expects 2009 output to fall 6.2 percent, far worse than its January forecast for a 2.6 percent decline. China is expected to slow to about 6.5 percent this year, half the 13 percent growth rate recorded pre-crisis in 2007 but still a strong performance given the global context, according to the IMF. UNCERTAIN OUTLOOK The IMF warned the financial crisis remains acute. "The financial market stabilization will take longer than previously envisaged, even with strong efforts by policymakers," it said. Thus, financial strains in the mature markets are projected to remain heavy until well into 2010, and overall credit to the private sector in the advanced economies is expected to decline in both 2009 and 2010. Meanwhile, emerging and developing economies are expected to face greatly curtailed access to external financing in both years. In a semi-annual report Global Financial Stability Report (GFSR), which was released on Monday, the IMF said write-down on U.S.-originated assets to be suffered by all holders will be 2.7 trillion dollars, "largely as a result of the worsening base-case scenario for economic growth." Total expected write-downs on global exposures are estimated at about 4 trillion dollars, of which two-thirds will fall on banks and the remainder on insurance companies, pension funds, hedge funds, and other intermediaries. In the latest World Economic Outlook report, the IMF warned that the current outlook is exceptionally uncertain, with risks weighed to the downside. The crisis has hurt international trade, with volume expected to plunge 11 percent this year before eking out 0.6 percent growth in 2010. Consumer prices in developed countries were under pressure and would fall 0.2 percent in 2009. "Even once the crisis is over, there will be a difficult transition period, with output growth appreciably below rates seen in the recent past," said the IMF. BOLD POLICY The IMF called for its members to take new bold policy stimulus to jump-start their economies. "This difficult and uncertain outlook argues for forceful action on both the financial and macroeconomic policy fronts," said the IMF. Past episodes of financial crisis have shown that delays in tackling the underlying problem mean an even more protracted economic downturn and even greater costs, both in terms of taxpayer money and economic activity. "Policymakers must be mindful of the cross-border ramifications of policy choices," said the IMF. "Initiatives that support trade and financial partners will help support global demand, with shared benefits." In advanced economies, scope for easing monetary policy further should be used aggressively to counter deflation risks. Although policy rates are already near the zero floor in many countries, whatever policy room remains should be used quickly, according to the IMF. Emerging economies also need to ease monetary conditions to respond to the deteriorating outlook. However, in many of those economies, the task of central banks is further complicated by the need to sustain external stability in the face of highly fragile financing flows, the IMF warned. The 185-member organization also warned against the rising protectionism. "Greater international cooperation is needed to avoid exacerbating cross-border strains," said the IMF. "Coordination and collaboration is particularly important with respect to financial policies to avoid adverse international spillovers from national actions." "A slide toward trade and financial protectionism would be hugely damaging to all, a clear warning from the experience of 1930s beggar-thy-neighbor policies," it warned.
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