China's Cui warns of risks from US stimulus

BRUSSELS -- The US Federal Reserve's latest round of quantitative easing is adding to financial market instability and inflationary pressure in emerging markets, China's Vice Foreign Minister Cui Tiankai warned on Tuesday.

The frank remarks, directed at the US central bank's announcement of a fresh round of bond-buying to stimulate the economy, dubbed QE3, is the latest in a round of increasingly pointed criticism between China and the US of the other's economic policy.

Speaking to reporters at a briefing in Brussels, Cui spelt out his concerns about the program that will see $40 billion of mortgage debt purchased each month until the outlook for jobs improves substantially.

"We are affected by the external environment," Cui said. "We are feeling the pain brought about by the situation in the United States and in Europe."

"For instance, the recent so-called QE3, I think, is adding to the instability on the international financial markets, is adding to the imported inflationary pressure for developing economies, including China, and is adding to the uncertainty in the commodity market and this would in turn affect food security for many countries."

Cui also addressed the sensitive issue of trade relations between China and the European Union.

"Some people are trying to create difficulties in China's investments abroad so they are not practicing what they preach (on free trade)," he said.

"We don't want to have a trade war with anyone. Not with the European Union, not with the United States," he added. "If there is any trade war between the major trading states in the world nobody would be better off."