Commenting on China's performance during the financial crisis, Krugman said China is guided by better policy than in the past. Observers feared that China would respond to the crisis by devaluing its currency, Krugman said, a potentially destabilizing move.

Whether it will devaluate its currency is another test for China in this global financial turmoil, Huang said. "While I see a lot of good domestic reasons to devaluate the renminbi, any devaluation at the current time will unsettle the international financial market."

Up to now, China has kept its currency relatively stable. Seeing China favor a domestic stimulus plan over currency devaluation, Krugman said it's "a good sign," and that China is playing "a constructive role" in this regard.

(Reporting from New York)

China's Suggestions

Chinese President Hu Jintao delivered a speech at the G-20 financial summit on November 15 in Washington, D.C. Analyzing the current international financial situation, Hu made four suggestions for reform:

-Stepping up international cooperation in financial regulation. The world should jointly establish principles for evaluating financial institutions and strengthen monitoring of capital flow throughout the world so as to better supervise financial institutions and agents and enhance transparency in the world financial market.

-Advancing reform of international financial institutions. These reforms are expected to increase representation of developing countries in international financial organizations and the world financial decision-making system. An early warning system should be set up to cover the whole world, especially the major international financial centers. An efficient crisis support system also needs to be established.

-Encouraging regional financial cooperation. Regional cooperation on financial infrastructure construction can enhance liquidity and provide help to countries in the area.

-Improving the international monetary system. The world needs to overhaul the current system so as to guarantee international currency stability.

The Chinese president also stressed that the international community should pay special attention to the impact of the crisis on developing countries, especially the least developed countries (LDCs). He made three proposals to help developing countries cope with the current financial crisis.

-Help developing countries maintain financial stability and economic growth. The international community, especially developed countries, has a responsibility to support developing countries and minimize the damage caused by the financial crisis.

-Maintain and increase assistance to developing countries. Developed countries should provide debt relief to LDCs and decrease import tariffs for these countries.

-Encourage economic reform in developing countries. These countries should adopt proper macroeconomic policies to improve their financial systems and adjust economic structures to promote stable development.

(Source: Xinhua News Agency)