He also said China should save less, boost domestic demand and continue to move towards greater currency flexibility if the global economic imbalances are to be addressed.

'The trade surpluses of these countries (Germany and Japan) leave them far too dependent on the health of global demand - the main reason why Germany's recession is so deep,' he said.

He said China's stimulus package had gone some way to easing the problem, and its plans to expand social welfare systems would help reduce heavy savings rates.

The minister said such structural imbalances had helped foster the banking crisis, and without addressing the weakness 'any other counter-recessionary strategy is palliative at best.' In the UK, as well as the United States, both consumers and governments will have to repair their balance sheets.

'We are going to have to save more, invest more and export more,' he said, referring to the UK.

He warned against easing up on economic governance reform now that the economy showed signs of picking up, saying economies should not be 'lulled back into complacency.'

The minister referred to banks looking to buy out government equity stakes 'tempting some banks to think that the events of 2008 can now be put behind them, like an unfortunate memory.' 'This despite the fact that there are huge amounts of bad debt still on bank books, and Western banks are still relatively lightly capitalized and asset prices are still potentially volatile,' he said.

Governments must work together on better regulation and governance to help prevent the crisis being repeated, with the International Monetary Fund (IMF) playing a key part, he said.

'If we value an open global economy as a tool for progressive ends - as a way of generating economic growth and eliminating poverty then we are going to have to think like internationalists.' -- REUTERS