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Asian, European Leaders Gather In Beijing For Financial Summit

Chinese Premier Wen (left) and President Hu are leading the talks.

Chinese Premier Wen (left) and President Hu are leading the talks.

Asian and European leaders have gathered for a two-day summit in Beijing that aims to help shore up the global economy in the face of the international financial crisis.

It comes as Asian and European stock markets fell sharply amid growing concerns of a global economic slowdown.

The two days of formal talks, known as the Asia-Europe Meeting, are taking place in Beijing's Great Hall of the People with an agenda that includes climate change and development.

But the minds of most leaders are focused on how they can cooperate together to lessen the impact of a global economic slow down.

Chinese President Hu Jintao and Premier Wen Jiabao have met bilaterally ahead of the summit with many different leaders from the 27 EU member states and 16 Asian countries that are attending the gathering.

Hu and Wen held talks with European Commission President Jose Manuel Barroso, who has said the EU would use the Beijing summit to urge China and India to help shore up world growth and join a November summit in Washington on the financial crisis.

The EU hopes China, with the world's largest currency reserves and the world's fastest-growing major economy, can help shape global financial reforms and tackle the economic imbalances at the root of the present turmoil.

Markets Fall

As the talks got under way ion October 24, Asian and European stock markets tumbled amid growing concern that the global financial crisis is impacting the earnings of private companies around the world.

Markets were down sharply at the start of trading in Europe, following the trend marked earlier in the day in Asia.

South Korea's benchmark stock index fell 10.6 percent to close below 1,000 points for the first time in more than three years. Japan's Nikkei index plunged 9.6 percent to end below 8,000 for the first time in more than five years.

Amid falling share prices and panic selling, Japanese government spokesman Takeo Kawamura tried to calm Japanese citizens about the stock market.

"The Japanese people and households should show more interest in stocks and look at stocks as a stable investment, not one that goes on an emotional roller-coaster ride with foreign investors," Kawamura said.

"I also think that in this era of low interest rates, the government should look into a policy that would promote stock investments, that looks upon the market as a way to get a stable return on investments."

But traders remain concerned that the global economic slowdown could last beyond the middle of next year. That has put more pressure on some Asian currencies, and raised concerns of a regional foreign-exchange crisis.

Earlier on October 24, the ASEAN group of Southeast Asian states agreed during talks with Japan, China, and South Korea to upgrade a long-established $80 billion web of currency swap lines among central banks in the region.

Those funds are set aside as a resource to allow a country plunging into a foreign-exchange crisis to rapidly call up financial firepower by swapping its currency for those of its neighbors.

The aim is to be able to sell borrowed money on the foreign-exchange market to relieve pressure on a currency that is declining in value in order to prevent a repeat of the meltdown that plunged several countries into deep recession during the 1997-98 Asian financial crisis.

compiled from agency reports