China warns of double dip recession danger

Wen Jaibao, the Chinese Prime Minister, warned yesterday of the threat of a double-dip recession as Europe's sovereign debt crisis puts a drag on economic recovery.

On a visit to Tokyo, Mr Wen said fiscal stimulus measures must be maintained to avoid tipping economies back into recession. "Some people argue that the global economy has already recovered and that we can now take stimulus exit measures, but I think that judgment is too early," the Premier said. "We need to prepare for difficulty. The debt crisis in some European countries may impede Europe's economic recovery and bring change to European markets."

He called for "calm observation" of the Greek debt crisis and a "steady-handed response" to its impact on eurozone growth.