VLADIVOSTOK, (Reuters) – China and Russia sounded the alarm about the state of the global economy and urged Asian-Pacific countries at a summit on Saturday to protect themselves by forging deeper regional economic ties.
Chinese President Hu Jintao said Beijing would do all it could to strengthen the 21-member Asia-Pacific Economic Cooperation (APEC) by rebalancing its economy, Asia’s biggest, to improve the chances of a global economic recovery.
Russian President Vladimir Putin said trade barriers must be smashed down as he opened the APEC summit which he is hosting on a small island linked to the Pacific port of Vladivostok by a spectacular new bridge that symbolizes Moscow’s pivotal turn to Asia away from debt-stricken Europe.
“It’s important to build bridges, not walls. We must continue striving for greater integration,” Putin told the APEC leaders, seated at a round table in a room with a view of the $1 billion cable-stayed bridge, the largest of its kind.
“The global economic recovery is faltering. We can overcome the negative trends only by increasing the volume of trade in goods and services and enhancing the flow of capital.”
Hu told business leaders before the summit the world economy was being hampered by “destabilizing factors and uncertainties” and the crisis that hit in 2008-09 was far from over. China would play its role, he said, in strengthening the recovery.
“We will work to maintain the balance between keeping steady and robust growth, adjusting the economic structure and managing inflation expectations. We will boost domestic demand and maintain steady and robust growth as well as basic price stability,” he said.
Hu spelled out plans for China, whose economic growth has slowed as Europe’s debt crisis worsened, to pump $157 billion into infrastructure investment in agriculture, energy, railways and roads.
Hu steps down as China’s leader in the autumn after a Communist Party congress, but he promised continuity and stability for the economy.
Putin, who has just begun a new six-year term as president, said on Friday Russia would be a stable energy supplier and a gateway to Europe for Asian countries, and also pledged to develop his country’s transport network.
RUSSIA LOOKS EAST
The relative strength of China’s economy, by far the largest in Asia and second in the world to the United States, is key to Russia’s decision to look eastwards as it seeks to develop its economy and Europe battles economic problems.
APEC, which includes the United States, Japan, South Korea, Indonesia and Canada, groups countries around the Pacific Rim which account for 40 percent of the world’s population, 54 percent of its economic output and 44 percent of trade.
APEC members are broadly showing relatively strong growth, but boosting trade and growth is vital for the group as it tries to remove the trade barriers that hinder investment.
The European Union has been at odds with both China and Russia over trade practices it regards as limiting free competition. Cooperation in APEC is also hindered by territorial and other disputes among some of the members.
Putin, 59, limped slightly as he greeted leaders at the summit. Aides said he had merely pulled a muscle. Underlining Putin’s good health, a spokesman said he had a “very active lifestyle.”
Discussions at the two-day meeting will focus on food security and trade liberalization. An agreement was reached before the summit to slash import duties on technologies that can promote economic growth without endangering the environment.
Breakthroughs are not expected on other trade issues at the meeting, which U.S. President Barack Obama is missing. He has been attending the Democratic Party convention and Washington is being represented by Secretary of State Hillary Clinton.
U.S. officials say Clinton’s trip is partly intended to assess Russia’s push to expand engagement in Asia, which parallels Washington’s own turn towards the Asia-Pacific region.
Also missing the summit was Australian Prime Minister Julia Gillard. Putin said she had dropped out because her father had died.