Vice premier warns against overflow of liquidity

SAINT PETERSBURG - The world should strengthen coordination to prevent a global overflow of liquidity and oppose all forms of protectionism amid the fragile economic recovery, Chinese Vice Premier Zhang Gaoli said here Friday.

Countries "should improve coordination of their national macro-economic policies ... undertake more effective measures in a constructive, open and cooperative way to avoid a global overflow of liquidity and inflation for the sake of the stability of the international financial system," Zhang said in a keynote address to the Saint Petersburg International Economic Forum, which is being held from Thursday to Saturday.

Zhang said the global economy had shown some positive signs this year, but a host of uncertainties remained and the economic growth still lacked momentum, so more cooperation and joint efforts were needed for the world economy to return onto a fast track of recovery.

He urged countries to take a firm stand against protectionism and resolve trade disputes through dialogue and negotiation.

"We must firmly promote trade liberalization, oppose all forms of protectionism and properly deal with trade disputes through dialogue, so as to build a more open, free and fair global trade," Zhang said.

As to the reform of global economic governance, the Chinese vice premier said the role of the Group of 20 (G20) should be strengthened and the voice of emerging markets and developing countries should be raised.

"All countries should actively push for the reform of global governance. Emerging markets and developing countries should enjoy more representation and a bigger voice in international financial institutions. And the role of the G20 in promoting global economic growth should be enhanced," he said.

The Saint Petersburg International Economic Forum is an annual gathering of world political and business elites similar to the World Economic Forum in the Swiss ski resort of Davos.

This year, the forum provides a unique platform for global leaders to engage with their peers in finding solutions to the most pressing issues affecting the world.

Those issues include political challenges, the fragility of the global economic recovery, the economic and social fractures emanating from the crisis, the importance of capitalizing on new emerging opportunities as well as the ongoing shifting power equations, according to the forum's official website.