Chen Fengying, director of the Institute of World Economy Studies in the China Institute of Contemporary International Relations, told China.org.cn that the November 15 G20 summit had made a good start on tackling the global financial crisis and its impact on the world economy would be far-reaching.

Turing words into deeds

Chen said the participants had managed to achieve consensus on two important points – to establish a global system to supervise international finance, and to reform global financial institutions. But she emphasized that the consensus had only been possible because America and Europe put aside serious differences on the details and direction of reform.

Chen Fengying, director of the Institute of World Economy Studies in the China Institute of Contemporary International Relations  is answering questions.

Chen praised the summit for pointing to imbalances in the world economy as the underlying cause of the crisis. Correctly identifying the underlying cause of the crisis would help financial institutions such as the IMF and the World Bank prevent a recurrence of the turmoil, Chen said.

The summit agreed to an action plan of short, medium and long-term measures. The main short term objective is to strengthen transparency and accountability by enhancing disclosure of complex financial products, and the financial conditions of firms.

Chen said the first crisis of globalization required a coordinated international response and the most important thing is to reform financial institutions. A medium-term goal must be a comprehensive reform of the World Bank and the IMF.