The United States suggested Europe's debt crisis would have minimal impact on global growth, but China took a more pessimistic view, warning it would impact demand for its exports and other regions would suffer too.
The two countries, meeting in Beijing for high-level talks, set the differing tones as eurozone leaders sought to conquer doubts that they can cut fiscal deficits and stimulate growth to overcome the crisis.
Global markets have been gripped by fears that a debt crisis engulfing Greece will spread to other highly indebted nations, particularly in southern Europe, dragging down the continent's economy and hitting trade with the United States and Asia.
"The euro zone problems haven't been cleaned up yet," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.
"And even though the global economy is definitely showing more signs of recovery than it did 6 months ago, worry continues that the euro zone's woes will put a brake on this growth."
Greece's prime minister yesterday ruled out defaulting on payments or restructuring its debt and his Spanish counterpart vowed to push through an austerity plan despite union threats to strike.
In Beijing, where officials were meeting for US-China Strategic and Economic Dialogue, there were contrasting messages about the dangers Europe's woes posed to the global recovery.
US Treasury secretary Timothy Geithner, who flies to Europe tomorrow for talks in Britain and Germany on stabilising the continent's economy and financial markets, said today the global economy had been strengthening faster than expected.
At the weekend, a senior US Treasury official, who declined to be identified, had said the European crisis would have minimal impact on the world economy.
China's state planning commission seemed less optimistic, saying today that the crisis would affect demand of Chinese goods.Yesterday, finance minister Xie Xuren had warned that Europe's debt woes could hit other regions.
"At present, risks from European sovereign debt have increased factors of instability in the course of global economic recovery," Xie wrote an essay published in the Washington Post and on his ministry's website (www.mof.gov.cn).
Some analysts suggest China may delay letting its yuan currency rise in value - as Washington has urged - out of concern that its exports to Europe will suffer.
"China is unlikely to de-peg the yuan anytime soon,"Standard Chartered Bank said in a note to clients.
Citing, among other factors, the need to see some stabilisation in global markets and a sustained trade surplus, the bank said Beijing is likely to wait until the third quarter to unleash the yuan. It had previously predicted May.
Japan's government also raised concerns, saying in its monthly economic report that attention should be paid to the potential risks of a slowdown in overseas economies, particularly in Europe.
European leaders have sought to deal with a crisis that has pushed many euro zone member states' borrowing costs sky high through a €110 billion bailout of Greece and the setting up of a $1 trillion safety net to stabilise the single currency.
But after riots on the streets of Athens and with strikes looming elsewhere, investors remain concerned about whether Europe has the political will to rein in bulging government deficits and tackle sluggish growth.
"Europe is trying to solve a debt problem with further debt," said Domenico Lombardi, president of the Oxford Institute for Economic Policy.
Greek prime minister George Papandreou said in an interview published yesterday in a Spanish newspaper that EU governments had been slow to act in order to prevent the Greek crisis spreading to other members of the 16-country euro zone.
Reuters