Geithner, Chinese vice premier discuss economic crisis

Treasury Secretary Tim Geithner spoke by phone Wednesday with Chinese Vice Premier Wang Qishan about "developments in international markets" and recent global economic turmoil, his office said Wednesday. Their talks came as weak manufacturing activity in China and dismal growth data from India underscored Asia's vulnerability to Europe's deepening economic crisis and sparked fresh calls for government intervention. Geithner and Wang also discussed the upcoming G20 summit in Mexico, when heads of the world's major developed nations and emerging powers later this month will meet amid a surge of fear over the global economy, the brief statement read. Forecasts have shown that Europe could be set for a rebound, but unemployment will keep on rising, a conundrum that highlights the difficult economic reforms that still need to be made. Fresh urgency was mounting in particular over the economic situation in Spain, which is in the midst of a deep recession brought on by the bursting of a property bubble. Spain is the latest European economy hit by crisis, as the EU on Wednesday unveiled new plans for winding up failing banks, a first step towards a controversial eurozone "banking union." Meanwhile, the World Bank said in a report last month that China's economic growth will continue to ease this year, presenting policy makers in Beijing with the challenge of preventing an excessively abrupt slowdown,. As key overseas markets weaken, China will need to sustain its export-oriented economy with more fiscal spending, the bank said in its half-yearly review of Asia's developing economies.