By Terence Poon

Of DOW JONES NEWSWIRES

BEIJING -(Dow Jones)- Nearly a year after it introduced its own stimulus program, China is likely to press Group of 20 nations to continue pro-growth policies, as some governments start withdrawing support for their economies.

A rapid recovery in China--its economy is now expanding as fast as it was before the global financial crisis intensified in September 2008--is helping to drive growth in natural resource exporters such as Australia and Brazil as well as a broader recovery in the rest of Asia.

But China is looking to a global rebound to help sustain its own recovery, because its exports remain weak and the government needs time to build another growth engine: consumer spending.

Chinese foreign ministry spokesman Ma Zhaoxu Tuesday urged governments around the world to continue policies that support their economies.

"We need to proceed from our own national conditions and bear in mind the big picture of the early recovery of the global economy," he told reporters, days before G-20 finance ministers and central bankers meet in St. Andrews, Scotland.

Finance Minister Xie Xuren, People's Bank of China Gov. Zhou Xiaochuan and State Administration of Foreign Exchange Director Yi Gang are expected to represent China at the meeting on Friday and Saturday.

Besides cautioning other nations against unwinding their monetary and fiscal stimulus too soon--Australia's central bank Tuesday raised interest rates for a second time in as many months--the Chinese officials are also likely to fend off growing international calls to let the yuan rise, say analysts.

Because Beijing has held the yuan steady against the U.S. dollar for the past year, the dollar's recent drop has led the Chinese unit to depreciate against some currencies, such as the euro. That gives China's exporters an edge in international markets, generating its giant trade surplus, which is considered to be a major imbalance in the global economy.

China is likely to let the yuan rise mildly against the U.S. dollar next year, but it "won't promise anything" on exchange rates at the G-20 meeting, said Hu Yifan, chief global economist for Citic Securities in Hong Kong.

Investors are scrutinizing Chinese policy making more than ever. An abrupt reversal of its accommodative policies would hurt resource-rich nations, such as Australia and Brazil, and neighbors, such as South Korea and Taiwan, that have benefited from China's government-driven recovery.

As China uses some of its imported materials to process and assemble goods that it sells abroad, its recovery "won't play a big role in driving the global economy" and an early unwinding of stimulus won't deeply dent the world economy, said Ren Xianfang, an analyst with IHS Global Insight. But China is "crucial to global market confidence," she added.

China has started to worry about inflation risks, but has repeatedly pledged it will maintain its active fiscal policy and moderately loose monetary policy adopted in November last year, just as G-20 finance ministers were meeting in Sao Paulo.

Economists say Beijing, now feeling more confident about the economic outlook, is likely to begin tightening policy next year, raising benchmark interest rates and the share of deposits banks must park with the central bank.

Chinese officials at the G-20 meeting may also repeat Beijing's plans to help businesses rely less on consumers in the U.S. and Europe, and more on consumers at home.

But they are unlikely to come up with concrete proposals on how G-20 nations should review each other's economic policies and how far they should go toward reducing global imbalances--including excess savings in nations like China and excess spending in nations like the U.S.

The G-20 leaders agreed in late September, in Pittsburgh, to such a framework for policy review.

The G-20 offers a platform "for exchange and dialogue, to build consensus on common issues," said Zhao Xijun, a professor at Renmin University of China in Beijing. "But on the specifics, each nation will implement them on its own."

-By Terence Poon, Dow Jones Newswires; 8610 8400-7799; terence.poon@dowjones.com

(END) Dow Jones Newswires

11-03-09 2346ET