Finance ministers and central bank governors from the Group of 20 (G20) major industrial and emerging economies closed their annual meeting on Sunday, vowing to jointly tackle the global financial crisis.
The G20 has "a critical role to play in ensuring global financial and economic stability," said a joint statement released at the end of the two-day meeting.
Brazilian Finance Minister Guido Mantega, who chaired the meeting, said the participants agreed that "joint and coordinated action," "greater regulation of financial markets" and "total agreement" on policies are required to regain financial stability.
Other actions agreed upon at the meeting include fiscal incentives to enterprises, and more international cooperation to identify and rapidly respond to signs of national and international crisis.
The officials agreed that tax cuts and increased government spending are necessary to avoid a recession. They also pledged increased communication and coordination in the face of the crisis.
The agreements reached at the meeting will be discussed further at the upcoming summit of the group's leaders scheduled for Friday and Saturday in Washington.
Mantega, whose country holds the rotating presidency of the bloc, said each country will take action according to its own situation.
He described Russia's call for the founding of a G20 treaty similar to the EU's Maastricht Treaty, which defines the fiscal targets of EU members, as an "interesting" alternative.
However, as the United States and some EU countries have larger fiscal deficits than others, they should be given larger deficit tolerance under such a treaty, he added.
Mantega said most participants believed the bailout packages of the United States and Europe have so far failed to restore the credit lines and confidence needed to halt the crisis.
Thus, additional measures are necessary, he said.
Brazilian President Luiz Inacio Lula da Silva called for a "new world financial architecture" to be built in the wake of the current financial crisis.
Lula made the plea for a serious and urgent reform of the current global financial system, which he described as "a castle made of playing cards."
The Group of Seven (G7) alone will not be able to resolve the world's problems, and we need a new, more participative governance, Lula said.
The G7 is composed of the seven major industrial countries -- the United States, Japan, Britain, Germany, France, Italy and Canada.
It is high time for a pact among states to create a new global financial architecture, he added.
During the meeting, the World Bank, United States and Brazil hailed China's massive domestic economic stimulus plan aimed at fending off the international financial crisis.
World Bank head Robert Zoellick, who also attended the G20 meet, said China is preparing for strong fiscal expansion as a response to the economic situation at home.
Calling the move "very wise," Zoellick said China's policy of investment expansion and increased infrastructure inputs could be a model for other countries.
David McCormick, the US Treasury Department's undersecretary for international affairs, said China's move could also benefit other nations in the aftermath of the crisis.
Mantega said China had taken "the lead" with the plan to avoid an economic slowdown following the international financial turmoil.
He said Beijing's program is an "anti-cyclic" policy to avoid the shrinking of the nation's economy.
China announced Sunday that it will loosen credit conditions, cut taxes and embark on a massive infrastructure spending program in a wide-ranging effort to offset adverse global economic conditions by boosting domestic demand.
A stimulus package estimated at 4 trillion yuan (about US$570 billion) will be spent over the next two years to finance programs in 10 major areas, such as low-income housing, rural infrastructure and transportation.
Zhou Xiaochuan, governor of China's central bank, said his country will help stabilize international financial markets by maintaining economic growth and expanding domestic demand.
China's central bank is closely following the situation in international financial markets to make policies on further readjustment of interest rate, Zhou said.
He said the central bank will cooperate with the International Monetary Fund to stabilize financial markets.
Zhou predicted an 8-9 percent economic growth for China next year, saying the steady growth of the Chinese economy will help global financial markets return to normal.
Founded in 1999, the G20 is a forum to promote dialogue between advanced and emerging economies on key issues concerning economic growth and the stability of the financial system.
The bloc comprises the European Union, the United States, Britain, France, Germany, Italy, China, Russia, Japan, India, South Korea, Indonesia, Turkey, Saudi Arabia, South Africa, Canada, Australia, Argentina, Brazil, Mexico and the Bretton Woods Institutions.
(Xinhua News Agency November 10, 2008)