China vice premier says world economy to worsen-FT

China's vice premier Wang Qishan said the global financial crisis is spreading and the economy will get worse before it gets better, in a written article in the Financial Times on Friday.

He said financial stability would be aided by keeping exchange rates of major currencies stable through exchange rate policy coordination.

He also rejected protectionism, saying "it is vital unequivocally to reject protectionism of all kinds."

"The global financial crisis is still spreading," he wrote.

"The world economy is going to get worse before it gets better, and the situation remains serious."

In an article that drew on the importance of British-China relations, he said both countries should "take even stronger measures jointly to meet challenges and promote early recovery of both our economies and the global economy".

He added, it was imperative that countries coordinated their macroeconomic policies and that they adopted stimulus, fiscal and monetary policies.

"China's huge stimulus package has now produced initial results," he wrote.

"There has occurred positive change in our economy and things are better than previously expected."

Wang said China will continue with its "proactive fiscal policy and moderately easy monetary policy to ensure sound and steady growth of our economy, and in so doing contribute to the recovery of the global economy".

He called for a strengthening of regulation, on the basis of sovereign rules, cooperation in regulating private capital flows, financial institutions and markets, products and intermediaries.

The vice premier also said it was important to improve the basic financial system including international accounting standards, valuatoin of complex financial products, governance structure, the credit rating system and internal risk management.