FRANKFURT - CHINA'S central bank pledged on Friday to step up cooperation with other countries to help cope with the world economic crisis and urged governments to put a special focus on fiscal policy.

Speaking at a conference hosted by the European Central Bank, one of the deputy governors of China's central bank, Mr Su Ning, said the central bank had long fostered cooperation on global financial issues but that it hoped to do more.

Mr Su's comments came as Chinese President Hu Jintao heads to a financial summit in Washington at which developed nations will look to Beijing to help fix global economic problems.

'The PBC will further reinforce international policy coordination and cooperation, and join force with the international community in dealing with the financial crisis,' Mr Su said in speech notes obtained in advance by Reuters.

In later remarks that were delivered, Mr Su called for greater efforts to improve the global financial system and to give developing and emerging market economies a greater say in the way the financial system is regulated.

Smaller economic powers needed to be kept better informed and their voice and 'rule-setting' power increased to strengthen macro-economic policy coordination, he said.

China's Hu will sit with 19 other leaders of the big rich and developing countries on Saturday to discuss ways of repairing and revamping the world financial system and to tackle the worst financial crisis to hit the globe in 80 years.

Such key questions of global finance were once largely the domain of the rish Group of Seven nations, but the doors this time are open more widely in recognition of the growing clout of other nations such as China.

To ward off the impact of the financial crisis on export powerhouse China, the authorities had adopted a proactive fiscal policy and 'moderately loose' monetary policy, Mr Su said.

China would suffer a large fiscal deficit, Mr Su said, as a result of the stimulus package launched by the government days earlier which has a headline price tag of 4 trillion yuan (S$890 billion).

One trillion yuan of that total would come from the central government budget, he said.

'So in the next two years, we are expecting (an) enormous fiscal deficit so I sincerely hope that all the countries across the world could cooperate also in the fiscal arena,' he said in response to a question from the audience.

Similar measures were expected to be unveiled by many countries, Mr Su said.

'So maybe when our finance ministers get together they could pay less attention on monetary policy but should pay more (attention to) work on fiscal policy,' he said.

China's central bank had worked to improve the effectiveness and flexibility of its monetary policy to promote stable growth in the face of major challenges including imbalances in the country's balance of payments position, he said.

Mr Su gave few clues concerning future monetary policy in the face of 'violent turbulence' in global markets while acknowledging that the impact of the crisis on China's growth and financial stability 'could not be taken lightly'.

'Going forward, the PBC will strive to improve the pre-emptiveness, scientific approach and effectiveness of monetary policy, flexibly use monetary instruments in order to promote stable and rapid economic development and financial stability,' he said. -- REUTERS