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Asian, European Leaders Meet to Restore Confidence in Markets


Asian and European leaders are meeting in the Chinese capital to discuss ways to increase confidence in world markets. Chinese President Hu Jintao has said uncertainties and instability are increasing in China's economy as a result of the global financial crisis. Daniel Schearf reports from Beijing.

Leaders from over 40 European and Asian countries met in Beijing Friday to encourage solidarity in facing the crisis.

Global financial problems were at the top of the agenda as they gathered for the first day of the two-day Asia-Europe Meeting, known as ASEM.

China's President, Hu Jintao, addressed the opening ceremony carried live on national television. He said the crisis was increasing instability in China's economy and that concerted efforts were needed to shore-up their interdependent economies.

He says China's economic growth faces various hardships and challenges. He says for China's economy to maintain a healthy state is itself an important contribution to global financial market stability and global economic development.

Earlier in the day Southeast Asian countries plus China, Japan, and South Korea, agreed to an $80 billion regional emergency fund to battle the effects of the crisis.

Nonetheless, Asian stock prices continued to tumble. Hong Kong's Hang Seng index fell to a four-year low while China's benchmark stocks dropped to a two-year low. The Japanese and South Korean exchanges dropped to similar record lows.

The European Commission President, Jose Manuel Barroso, said Asia and Europe needed to work with world partners to restore growth, stability, and confidence.

"We cannot meet these challenges by closing the door and simply looking after our own house. We have all benefited from trade and an open business environment," Barroso said. "So, we should firmly resist calls for protectionism, isolation and economic nationalism. This would only harm us and our prospects for recovery."

Despite the financial crisis topping the meeting agenda, Barroso said equally important was working together on a range of critical world issues.

The meeting is also to address cooperation on climate change, sustainable development, and energy security, among other issues.

Europe wants further commitments from advanced developing nations like China and India to reduce greenhouse gas emissions.

However, the Asia-Europe Meeting is a summit for discussion and demonstrations of cooperation and is not expected to produce any binding agreements.

China's official Xinhua news agency says during the meeting Chinese officials are expected to put forward a proposal to build an "eco-city network" in Asia. It did not elaborate.