March 26 (Bloomberg) -- People’s Bank of China Governor Zhou Xiaochuan said the world’s third-largest economy is recovering and contrasted his government’s “decisive” action with delays in other countries.

“Leading indicators are pointing to recovery of economic growth,” Zhou said in an article on the central bank’s Web site today. The government “has taken prompt, decisive and effective policy measures, demonstrating its superior system advantage when it comes to making vital policy decisions,” he said.

Zhou called this week for the creation of a new international reserve currency, signaling concern at the dollar’s weakness and China’s ambitions for a leadership role at next week’s Group of 20 summit. Finance Minister Xie Xuren urged world leaders today to step up economic stimulus to restore market confidence and to fend off trade protectionism.

“China has clearly been moving ahead of the rest of the G- 20 in terms of thought leadership and laying the groundwork for what will be discussed,” said Glenn Maguire, chief Asia-Pacific economist at Societe Generale SA in Hong Kong. “China responded extremely quickly and with great vigor to the slowdown.”

China’s urban fixed-asset investment jumped 26.5 percent in the first two months from a year earlier, new lending quadrupled in February and vehicle sales rose 25 percent as the government implements a 4 trillion yuan ($585 billion) stimulus package. The Shanghai Composite Index has jumped 30 percent this year.

Systemic Risk

G-20 leaders convene in London April 2 to find ways of strengthening international regulation in the aftermath of the worst financial crisis since the 1930s.

China is becoming more assertive on international monetary and economic issues as the G-20 summit approaches. Earlier this month, Premier Wen Jiabao said he was worried about the value of China’s Treasury holdings and asked the U.S. to guarantee their safety.

Zhou said today that governments should consider giving mandates to finance ministries and central banks to use extraordinary means to contain systemic risk “in order to allow them to act boldly and expeditiously without having to go through a lengthy or even painful approval process.”

U.S. Treasury Secretary Timothy Geithner called this week for expanded government powers to deal with failing non-bank financial institutions such as American International Group Inc.

Today, Geithner is expected to ask Congress to bring large hedge funds, private-equity firms and derivatives markets under federal supervision for the first time as part of a revamp of U.S. financial rules, administration officials said on condition of anonymity.

Decline Curbed

On China’s economy, Zhou said measures already taken have produced “preliminary” results and the “rapid decline in growth has been curbed.”

Besides the stimulus package, China has cut interest rates five times since September, has offered incentives for exporters and has stalled the gain in its currency to achieve an economic growth target of 8 percent.

The Shanghai Composite Index gained 3.1 percent to the highest level in six weeks today. The gauge is the best performer this year among 89 benchmark measures tracked worldwide by Bloomberg.

Hong Kong billionaire Li Ka-shing said in Hong Kong today that investors with cash should consider buying equities and real estate, adding China’s economic recovery will be the “fastest.”

Global Recession

China’s growth slid to the weakest pace in seven years in the fourth quarter as trade slumped because of the global recession.

SAIC-Iveco Hongyan Commercial Vehicle Co., a Chinese truckmaker, said today it is winning orders from local miners for deliveries as early as the third quarter, indicating demand may be recovering.

“We are receiving truck orders for their operations in Southern Africa and India,” Matthew Wang, general manager of SAIC-Iveco Hongyan’s Kairui sales center, said in an interview during the Asian Mining Congress in Singapore. “Our business is increasing as copper prices rise.”

China will make more cuts to export taxes on textiles, garments, steel, non-ferrous metals, petrochemicals and electronics from April 1 to help revive key industries, the State Council said yesterday.

“Chinese policy makers seem increasingly confident that their response to the sharp fall in external demand has successfully limited the damage to overall growth,” said Brian Jackson, senior strategist at Royal Bank of Canada in Hong Kong.

To contact the reporters on this story: Li Yanping in Beijing at yli16@bloomberg.net

Last Updated: March 26, 2009 07:48 EDT