Chinese President Hu Jintao expressed concerns over the ailing US financial system in a phone conversation with US President George W. Bush, state media reported Wednesday. China, which holds hundreds of billions of dollars in US government bonds, has enacted a growing number of measures to stimulate economic growth as its crucial export sector suffers from downturns in the US and Europe. The Chinese economy expanded by 9 percent in the third quarter, its slowest pace in five years. Waves of layoffs in the manufacturing sector, joined by downturns in real estate and the stock market, could threaten the government's all-important goal of social and political stability. In their conversation Tuesday night Chinese time, Hu told Bush he hopes US stabilization measures would “take effect as soon as possible, restore investor confidence and prevent further expansion of the crisis,” the Xinhua News Agency said. “The measures are conducive to the stability of the world economy and financial markets,” it quoted Hu as saying. The two also discussed upcoming financial summits and other forms of international cooperation to stabilize markets, Xinhua said. China's latest stimulus measures, announced by the Ministry of Finance on Wednesday, were aimed at shoring up the slumping real estate market. The government was waiving transaction fees for the sale or purchase of homes and cutting the required down payment on home purchases from 30 percent to 20 percent. Taxes on apartments smaller than 970 square feet (90 square meters) were lowered for first-time home buyers from 1.5 percent to 1 percent.
