Putin and Wen Regale U.S. on Economic Crisis at Davos Economic Forum

Russian Prime Minister Putin said:

"(The current economic state is a)perfect storm. I just want to remind you that, just a year ago, American delegates speaking from this rostrum emphasised the US economy's fundamental stability and its cloudless prospects. Today, investment banks, the pride of Wall Street, have virtually ceased to exist. In just 12 months, they have posted losses exceeding the profits they made in the last 25 years. This example alone reflects the real situation better than any criticism."

"Excessive dependence on a single reserve currency is dangerous for the global economy.

"The time for enlightenment has come. We must calmly, and without gloating, assess the root causes of this situation and try to peek into the future.

"The entire economic growth system, where one regional center prints money without respite and consumes material wealth, while another regional centre manufactures inexpensive goods and saves money printed by other governments, has suffered a major setback. A considerable share of the world's population still cannot afford comfortable housing, education and quality health care. Even a global recovery posted in the last few years has failed to radically change this situation."

China Premier Wen Jiabao said:

 "(Recent financial conditions are attributable to) inappropriate macroeconomic policies of some economies and their unsustainable model of development characterized by prolonged low savings and high consumption; excessive expansion of financial institutions in blind pursuit of profit; lack of self-discipline among financial institutions and rating agencies and the ensuing distortion of risk information and asset pricing; and the failure of financial supervision and regulation to keep up with financial innovations."

"In other words, we must strike a balance between savings and consumption, between financial innovation and regulation, and between the financial sector and real economy.

"The current crisis has inflicted a rather big impact on China's economy. We are facing severe challenges, including notably shrinking external demand, overcapacity in some sectors, difficult business conditions for enterprises, rising unemployment in urban areas and greater downward pressure on economic growth."

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