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US bailout bill can stabilize markets: China

world Updated: Oct 04, 2008 09:11 IST
historic US$700 billion

China hopes a historic US$700 billion US government bailout of the financial industry will help stabilize global markets and restore investor confidence, the central bank said in a notice on its Web site on Saturday.

The People's Bank of China praised the approval of the bill and said China was willing to work with the US and other countries to stabilize markets worldwide.

"We hope this bill can be implemented as soon as possible and gain positive results, to stabilize the US and global financial markets and restore the confidence of investors," the statement said.

A reluctant US Congress abruptly reversed course and approved a US$700 billion government bailout bill for the battered U.S. financial industry on Friday. US President George W Bush swiftly signed it.

China said the central bank and other regulatory agencies have taken steps to deal with the effects from the US financial crisis, including urging its financial institutions to strengthen risk management.

The financial situation in China is stable and safe, the statement said.

China's state-owned banks have avoided the turmoil roiling Western markets. Chinese banks hold bonds from failed Wall Street house Lehman Brothers, but they are a tiny fraction of their vast assets.

The 263-171 House vote Friday capped two weeks of tumult in Congress and on Wall Street, punctuated by urgent warnings from Bush that the country confronted the gravest economic disaster since the Great Depression if lawmakers failed to act.