China Welcomes U.S. Rescue Plan, Offers Cooperation

By Irene Shen

Oct. 4 (Bloomberg) -- China's central bank said it hopes to see enhanced cooperation and coordination with U.S. and among other countries to stabilize global financial markets after the U.S. Congress approved a $700 billion rescue package.

``We're happy to see the bailout passage,'' the People's Bank of China said in a statement on its Web site today. ``All countries should take the responsibility to cooperate, as we share the same interest and goal in facing this crisis.''

The central bank said it had already taken measures to reduce the impact of the U.S. financial crisis on China and would continue to do so, without specifying. It last month reduced its one-year lending rate to 7.20 percent from 7.47 percent, and lowered the reserve-requirement ratio for smaller banks to 16.5 percent from 17.5 percent.

``If China doesn't move actively, the global recession would be deeper,'' said Frank Gong, JPMorgan Chase & Co.'s Hong Kong-based chief China economist.

``To keep China's economy strong and stable is the biggest contribution we can make to the global economy,'' the central bank said in today's statement, citing Premier Wen Jiabao.

The House of Representatives voted in favor of the bailout yesterday after rejecting the original bill on Sept. 29. The bailout comes after global banks racked up almost $590 billion in credit losses and asset writedowns stemming from the worst housing slump since the Great Depression.

To contact the reporter on this story: Irene Shen in Shanghai at ishen4@bloomberg.net