China calls on US, Japan to fix their finances

TOKYO (AFP) - China said on Saturday the failure by Washington and Tokyo to fix their fiscal problems was hurting the global economy, as it called for "bold, swift and decisive action" to reverse a slowdown.

Deputy central bank governor Yi Gang warned the absence of a "credible, medium-term fiscal consolidation in some of the major advanced economies such as the United States and Japan" is unsettling for the world economy.

"Uncertainties related to fiscal sustainability weigh on sentiment and confidence, negatively affecting consumption, investment, and hiring decisions," Mr Yi said in a statement to a key International Monetary Fund (IMF) committee.

"The slow recovery in these major advanced economies poses costly spillover effects to the rest of the world," he added.