By Kirby Chien
BEIJING (Reuters) - Beijing and the deep pockets of China Inc are emerging as potentially vital players to limit the economic damage from the worst global financial crisis in 80 years.
China, the world's fourth-largest economy, clearly has the wherewithal to take a leading role. It has so far escaped the worst of the turmoil but Beijing's willingness to step up to the plate is in question.
That is the backdrop for a Reuters China Summit later this week, which will host executives from companies such as the parent of mainland's top e-commerce firm, Alibaba.com (1688.HK: Quote, Profile, Research, Stock Buzz), to EADS' (EAD.PA: Quote, Profile, Research, Stock Buzz) Airbus.
China has said it is willing to shoulder global responsibility, but President Hu Jintao has said the biggest contribution it can make is to keep its economy humming.
Annual growth slowed sharply to 9.0 percent in the third quarter, and the latest surveys of manufacturers suggest demand has slumped further.
British Prime Minister Gordon Brown has singled out China, with its $1.9 trillion in currency reserves, as a country that could lend money to the International Monetary Fund to help it stabilize the world financial system.
China has yet to respond, but it has not made a major investment in a foreign financial institution this year after several high-profile deals in 2007 returned nothing but red ink.
And while China's outbound investments have more than doubled to $46 billion so far this year, stakes in overseas financial institutions plunged as a percent of total investment to 14.3 percent from 73.1 percent in 2007, according to Thomson Reuters data.
Profit growth is also a worry as China's listed companies, after delivering robust earnings growth every quarter for two years, are seeing profits start to shrink as the global financial crisis hits more severely than many had expected.
NO FREE PASS
Property firm SOHO China (0410.HK: Quote, Profile, Research, Stock Buzz) will be quizzed about the government's recent moves to stimulate the struggling sector, which accounts for a quarter of the country's fixed-asset investment and is a crucial pillar of the economy.
Beijing, worried about a housing price bubble only a year ago in a sector that accounts for about 10 percent of the economy, tightened its grip on loans to deter speculative buying, triggering steep declines in share prices and new-home values.
With the economy poised to post its worst performance in six years, the enveloping financial gloom helped persuade authorities to reverse course in October, cutting property transaction taxes, mortgage rates and down payments.
"China will emerge out of this crisis much stronger than before," said David Cui, the head of China equity research and strategy at Merrill Lynch.
But Cui said exports and property, two traditional engines of China's economic growth, could be under pressure for years. Continued...
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