Japanese finance minister Taro Aso said late on Friday he had urged China to carry out currency reform and map out a mid-term structural reform plan with a timeframe. That list included some 800 commitments meant to simplify regulations and boost trade, investment and technology development, but many have yet to be carried out.
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“The debt finance growth model has reached its limit”, said Schauble said at an event organized by the Washington-based Institute of International Finance alongside the Shanghai meeting.
Spanish Finance Minister Luis De Guindos said in Shanghai on Friday the matter of Britain’s referendum on its membership of the European Union, which will be held on June 23, would feature in the final G-20 communique, which will be released Saturday.
Other officials due to attend include U.S. Federal Reserve Chairwoman Janet Yellen; China’s finance minister, Lou Jiwei, and its central bank governor, Zhou Xiaochuan, and their counterparts from Europe, Japan, South Korea, India and South Africa. It said another downgrade is likely in its April update.
“Global growth has disappointed because the innovation and ambition of global monetary policy has not been matched by structural measures”, said Carney at the IIF event.
Most policymakers “say that the room for additional monetary measures has become very limited”, German Finance Minister Wolfgang Schaeuble said Friday, according to Reuters.
She called on all G20 countries to speed up the implementation of structural reforms that they committed to under the G20 growth initiative.
“While we can hope for a substantive policy prescription, it’s a forlorn one”.
“(There’s a) need to avoid competitive devaluation, that’s competing in a beggar-thy-neighbor way for sharing a pie that’s either frozen or shrinking and it doesn’t lead anywhere good”, US Secretary of the Treasury Jack Lew said during the G20 meeting.
“A person might fall off the cliff, but I don’t think a country will fall off the cliff, so we have no option but to push forward the painful reform process, the sooner the better”.
A key worry, despite repeated Chinese denials, is that Beijing will allow its yuan to decline in value to support struggling exporters.
Economists and other governments complain Beijing has fueled global market volatility by failing to communicate policy changes clearly. “When formulating macroeconomic policy, G20 members need to keep in mind not just their own growth, but should also watch for the spillover effects of their policies”, he said.
“Chinese policy makers realized they had made a serious mistake by staying silent as slowing growth, stumbles in the stock market and a fluctuating currency undermined the world’s perception of China’s economic stability”.
At a news conference ahead of the evening’s meeting of finance chiefs from the G-20, China’s top central banker, Zhou Xiaochuan, sought to reassure China’s trading partners that Beijing won’t drastically weaken the Chinese currency and that Beijing has sufficient tools to support the economy.
The foreign view of China’s economic health was shaken previous year by a stock market collapse that wiped out $5 trillion in paper wealth. The Shanghai composite fell 6.4 percent on renewed concerns about the country’s manufacturing sector and market liquidity.
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“In China, individual mortgage loans account for somewhere between 10 percent and 20 percent of total banking loans, which is at relatively low level compared to that of some countries, where the ratio is between 40 percent and 50 percent”, said Zhou. He noted that it still was among the world’s strongest performances.
