Special report:  Hu Attends Financial Summit, APEC Meeting, Visits Four Nations

    by Hu Fang

    WASHINGTON, Nov. 14 (Xinhua) -- When the heads of 20 industrialized and emerging economies meet here Saturday to discuss the ongoing financial crisis and reforms to the global financial architecture, a course will likely be set toward preventing such a disaster from ever recurring.

    However, some analysts have cautioned people not to expect too much from the summit.

    "The summit can be seen as a symbol that the international community has started to remodel the global financial system," Gao Bai, a professor in the Department of Sociology at Duke University in North Carolina, told Xinhua Friday.

Group of Seven central bank governors pose for a group photo after their meeting at the Treasury Department in Washington, the Unuted States, Oct. 10, 2008.  (Xinhua/Zhang Yan)Photo Gallery>>>

    However, it is just the beginning of a process to reshape the world financial system, Gao said. He expects a very complicated process during which all negotiators will definitely do all they can to ensure the maximization of their own benefits from the new system.

    Further development in the financial markets and economic prospects will also affect the process, Gao added.

    Conflicts Emerge Over Reforms

    A consensus on the need to reform the world financial system has been reached as the worst financial crisis in decades has exposed significant flaws in the current system.

    It is therefore necessary to make changes to minimize the risk of another crisis.

    However, it will be hard to reach a consensus on how to reform the system. Emerging proposals to sharpen existing regulatory tools appear to conflict with plans to create entirely new ones.

    European leaders favor tighter regulations. They are pushing for broad new roles for international organizations, thus empowering them to monitor everything from the global derivatives trade to the way major banks are regulated across borders.

    But the United States seems reluctant to agree.

    French President Nicolas Sarkozy, who pushed for the G20 summit, says it must produce concrete and immediate results.

    U.S. President George W. Bush, however, says the meeting would be "the first in a series" and should focus on principles even though "the specific solutions pursued by every country may not bethe same."

    The United States, Britain and some other nations are worried that too much regulation may restrain the free-market system.

    In a speech Thursday, Bush stressed that the financial crisis is not a failure of the free market, urging world leaders to adopt "modest" financial reforms.

    "Our aim should not be more government," he said. "It should be smarter government."

    Meanwhile, emerging market economies are trying to get a greater say in regulating world markets and managing the global economy.

    The global financial system "collapsed like a house of cards" because of "dogmatic faith in non-intervention in markets," Brazilian President Luiz Inacio Lula da Silva said Saturday in SaoPaulo.

    "The crisis gives an opportunity for real changes," he said. "We cannot, we must not and do not have the right to fail."