(5th LD) APEC warns of growing 'downside risks' for global economy

(ATTN: ADDS statement in paras 3-4; RECASTS lead para; AMENDS headline)

BEIJING, Oct. 22 (Yonhap) -- The already-fragile global economic recovery is uneven and "downside risks" have increased, Asia-Pacific finance ministers warned Wednesday, saying they will continue to "flexibly" implement fiscal policies to help tackle global economic worries.

The warning came as finance ministers or their deputies from the 21 member economies of the Asia-Pacific Economic Cooperation forum ended their one-day meeting, weeks before Chinese President Xi Jinping is set to host the APEC's annual summit meeting in November.

"As the global economy still faces persistent weakness in demand, growth is uneven and remains below the pace necessary to generate needed jobs, and downside risks have risen," said a statement released by the APEC finance ministers' meeting at the Diaoyutai State Guesthouse in western Beijing.

"We recognize that achieving sustainable growth requires both short-term and longer-term policies," it said. "We will continue to implement our fiscal policies flexibly taking into account near-term economic conditions so as to support economic growth and job creation, while ensuring fiscal sustainability."

While the U.S.' economic growth seems steadier, a slowdown in China, concerns about another recession in Europe, the global threat of an Ebola pandemic and military action against the Islamic State have cast a shadow on the weak global economic recovery.

The International Monetary Fund recently cut its growth outlook for the global economy this year to 3.3 percent from 3.4 percent.

This week, China reported 7.3 percent growth in the third quarter of this year, marking its slowest expansion since the 2008 global financial crisis.

In a speech opening the Wednesday meeting, China's Vice Premier Zhang Gaoli warned that the world's "economic recovery remains difficult with downside risks still existing."

"The profound impact of the international financial crisis has not been fully removed," Zhang said. "Member economies must enhance the continuity of their respective macroeconomic policies and the resilience against various risks."

Zhang, the No. 7 man in China's ruling Communist Party's hierarchy, acknowledged that the Chinese economy is facing "quite a number of challenges," but expressed "full confidence" in meeting this year's growth target of around 7.5 percent.

"For China, from the start of this year, we have promoted reforms and made innovations in macroeconomic regulations to create a level playing field for various economic institutions so they can compete in a fair and equitable environment," Zhang said.

"The purpose is to spark dynamism of the market, the society and companies," Zhang said. "I believe that, through these measures, we have realized a stable economic performance."

Wednesday's meeting was attended by South Korean Finance Minister Choi Kyung-hwan and Japanese Deputy Prime Minister Taro Aso, but U.S. Treasury Secretary Jacob Lew didn't attend the gathering. Instead, the U.S. sent Deputy Secretary Sarah Bloom Raskin to the event.

Raskin held bilateral talks with the Chinese finance minister Lou on Tuesday and stressed "the decisive implementation of China's economic reform agenda, including the importance of moving to a market-determined exchange rate," the U.S. Embassy in Beijing said in a statement.

Choi also held a bilateral meeting with Lou on Tuesday, but details of the Choi-Lou meeting were not immediately known.

During the Wednesday meeting, Choi called for APEC member states to cautiously adjust their macroeconomic policies and communicate with each other in a more transparent manner.

The main goal of APEC, launched in 1989, is boosting trade among its members.

APEC includes Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the United States and Vietnam.

kdh@yna.co.kr
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