China, Japan urge global talks on economic crisis

TOKYO/WASHINGTON: China and Japan called for global cooperation yesterday after a financial market rout signalled fear that Europe's debt crisis could spin out of control and the US economy may slide into another recession.

The comments from Washington's two biggest foreign creditors pointed to growing concern of contagion as Asian stock markets tumbled following Wall Street's steep dive a day earlier.

In Japan, Finance Minister Yoshihiko Noda said global policymakers needed to confront currency distortions, the debt crises and concerns about the US economy.

"I agree that these subjects should be discussed," he told reporters a day after Japan intervened to sell yen. Each problem is important, but how to prioritise these issues is something to discuss from here on."

China Foreign Minister Yang Jiechi said US debt risks were escalating and countries should step up cooperation on global economic risks.

Yang, who is visiting Poland, called on the US to adopt "responsible" monetary policies and protect the dollar investments of other nations.

The US Federal Reserve holds its next policy-setting meeting on Tuesday, and economists say there is little more it can do to try to spur growth.

A flurry of weak economic data and Europe's debt woes have fed fears of a fresh recession, triggering Thursday's sell-off on Wall Street, which was the worst since the global financial crisis.

Some US$2.1 trillion (RM6.32 trillion) in market value was wiped off the MSCI All Country World Index this week as of Thursday's close, Thomson Reuters Datastream showed, and that total looked set to rise as Asian and European stocks fell yesterday. - Reuters