Merkel has spoken out against governments like the US and Britain spending their way out of the crisis.

But her fears were dismissed by Japanese Prime Minister Taro Aso, whose country has spent massively over the past decade, seeking to reignite the economy.

"Because of our experience of the past 15 years, we know what is necessary, while countries like the US and European countries may be facing this sort of situation for the first time," Aso told the Financial Times newspaper.

President Hu Jintao called for reform and efforts against protectionism.

"The international financial system should undergo necessary reforms in a comprehensive, balanced, gradual and effective manner to prevent a similar crisis in the future," the Xinhua News Agency quoted him as saying.

The summit, which aims to reach an agreement on revitalizing the global economy and reforming the world financial system, is billed as a watershed in efforts to battle the worst economic downturn in more than 60 years.

In the eyes of academics protectionism is the biggest plague.

More than 2,000 dignitaries and academics, including a Nobel prize-winning economist, signed a petition warning against "dangerous and foolish" protectionism and equating free trade with peace, mutual understanding, and global economic benefit.

Vernon Smith, winner of the Nobel Prize for Economics in 2002, was among those urging world leaders to promote peace and prosperity through a "common culture of commerce" in an open letter to G20 governments ahead of their summit today.

Drafted by the UK-based think tank International Policy Network, the petition warns that "the spectre of protectionism is rising".

"It is always a dangerous and foolish policy, but it is especially dangerous at a time of economic crisis, when it threatens to damage the world economy," the petition said.

World stocks kicked off the new quarter with strong gains in Japan but sharp losses in Europe after registering their best monthly performance since December 1999.

Investors were focusing on the summit.

"The danger is that the outcome vastly disappoints the hype," Gary Dugan, chief investment officer of Merrill Lynch Global Wealth Management, said in a preview note.

(China Daily April 2, 2009)