Hu warns that the economic situation "is very grim" (Roundup)

Nov 22, 2008, 7:57 GMT

Lima - Chinese President Hu Jintao, addressing business leaders Friday in Lima ahead of the annual APEC Leaders' Meeting, said that the current economic crisis presents the world with a major challenge.

'The situation is very grim,' Hu said.

The crisis has spread 'from some areas of the world to the entire globe, from developed countries to emerging countries and from the financial sector to the real economy,' he said.

Hu addressed the APEC CEO summit in Lima, ahead of the weekend's Leaders' Meeting of the Asia-Pacific Economic Cooperation (APEC) forum.

He called the current setting a 'critical juncture' and stressed the need to 'encourage cooperation and preserve stability.'

He stressed the need to pursue 'trade and investment liberalization and facilitation' and recalled that China is approaching the 30th anniversary of the process of economic reform that led to the country's great development of recent years.

However, Hu called for a form of development that is 'comprehensive, balanced and sustainable' and stressed the need for corporative responsibility as an 'imperative.' The Chinese leader noted that 'lessons' should be drawn from the current crisis in order to undertake reform of the global financial system.

Further, he distanced himself slightly from other APEC leaders who have put a greater emphasis on liberalization and called to avoid protectionism and to be careful of overregulation.

'Governments must strengthen guidance and oversight,' Hu said.

The Chinese leader did not shirk the responsibility that corresponds to what he called 'the largest developing country in the world.' Hu noted that China's economic development should be a major contribution to to the world's economic recovery.

APEC, in turn, should make the most of its diversity, interdependence and complementarity at the economic level to get through the crisis as well as possible.

Hu was set to meet with US President George W Bush later Friday in Lima.