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World must stop finance woes hurting growth: Wen
BEIJING (Reuters) - Governments must do whatever is needed, and without delay, to limit damage to the global economy from the crisis ravaging financial markets, Chinese Premier Wen Jiabao said on Saturday.
Speaking after a summit of 43 Asian and European leaders, Wen also signaled that China would back France's drive for tougher global financial rules at a crisis summit that U.S. President George W. Bush will convene next month in Washington.
"We must use every means to prevent the financial crisis impacting growth of the real economy," Wen told a news conference following a two-day Asia-Europe Meeting (ASEM) of the 27 EU member states and 16 Asian countries.
Wen said China would actively participate in the November 15 summit with a "responsible and pragmatic" attitude.
President Nicolas Sarkozy of France, which currently holds the rotating EU presidency, said he expected concrete decisions to come out of the Washington talks, which had to address the underlying causes of the crisis, not just their effects.
"We have all understood that it will not be possible to simply meet and have a discussion. We need to turn it into a decision-making forum," he told the news conference.
"It is simply impossible to talk about taxes and the financial crisis without talking about currencies and the way they interact. All of this is of course going to be discussed."
Sarkozy has told Chinese President Hu Jintao that he fears the United States, which is wary of excessive regulation, would be content if the summit produced "principles and generalities," according to a French presidential official.
Wen said the right balance had to be struck between regulation and innovation, but added: "We need financial innovation, but we need financial oversight even more."
Japanese Prime Minister Taro Aso said damage had already been caused. "Since financial products have become global, one country alone cannot supervise them," he told reporters. "I think we have a lot to think about."
The biennial ASEM forum also addressed issues such as food safety, climate change and the U.N.'s development goals.
But it was the meltdown in global markets that galvanized what is usually a talking shop short on substance.
Leaders woke to news that Wall Street had closed at 5-1/2 year lows, but the losses in the main stock indexes of around 3.5 percent were not as bad as expected given that shares in Japan had slumped 9.6 percent and Europe had sunk 5.4 percent.
Many economists say the United States and much of Europe are already in recession.
Private-sector activity in the 15 nations that use the euro contracted last month at the fastest pace since the currency was launched in 1999, while Britain's economy shrank 0.5 percent in the third quarter, much more than expected.
Confidence, cooperation and responsibility were the key to ending the malaise, Wen said.
"Confidence means that all countries, especially the developed ones, need to speedily take decisive measures to stabilize the financial markets so as to make people more confident, restore their confidence," the premier said.
He said weakening external demand was hurting China's economy, but not too badly. China's growth slowed sharply to 9 percent in the third quarter from 11.9 percent in all of 2007.
Beijing was confident that it could put a floor under the economy through appropriate policies such as developing the countryside and the vast provinces of western China, he said.
"Our domestic demand still has much potential. As long as our policies are on target, we can maintain steady, relatively fast growth," he said.
European Commission President Jose Manuel Barroso called for a "comprehensive, global" agreement on climate change based on "shared and differentiated" responsibilities -- a coded acknowledgement that rich states must do more than poorer nations like China to curb greenhouse gases.
"Just because we have a financial crisis, it does not mean that the climate change threat has disappeared," he said.
(Reporting by Jason Subler, Chris Buckley and Simon Rabinovitch; Additional reporting by Yoko Nishikawa; Writing by Alan Wheatley; Editing by Nick Macfie and Elizabeth Piper)
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