In a video message to the G20 Finance Ministers and Central Bank Governors Meeting, Chinese Premier Li Keqiang reiterated that China has the confidence to handle the complex economic situation at home and overseas.
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Without mention of explicit concerns about China’s policymaking and reform agenda, the communique published after the meeting said the magnitude of recent market volatility had not reflected the underlying fundamentals of the global economy.
Mr Morrison said he was looking forward to the implementation of reforms that the G20 had already started, referencing a push to crack down on multinational tax avoidance.
He said that major economies should not only be mindful of their own growth, but also watch for the spillover effects of their macroeconomic policies.
“This year, the G20 group is focused on adopting structural reforms to help economic growth in member countries”, the Finance Ministry was quoted as saying. “In most advanced economies, hard structural reforms have been deferred”.
Schaeuble insisted that reforms were more important and “thinking about further stimulus just distracts from the real task at hand”.
Mr Morrison said he backed the concerns of the German government prior to the meeting and relayed those comments in his bilateral meeting with Mr Schauble. The International Monetary Fund cut its forecast for this year’s global growth by 0.2 percentage points last month to 3.4 percent. An announcement is expected this Saturday as China’s National People’s Congress is held in Beijing.
The G20 nations said renewed efforts would be made to achieve the goal of 2 per cent additional growth by 2018.
“We agreed to use all tools – monetary, fiscal and structural – to boost growth”, China’s finance minister, Lou Jiwei, said at a news conference. It further cautioned that global growth could further be in trouble because of the oil price crash and geo-political conflicts happening around the world.
A surprise change in August in the mechanism Beijing uses to set its exchange rate prompted fears that the yuan might be weakened to support struggling Chinese exporters. “Members really know they don’t have much time left”.
“It would not be reasonable to expect a crisis response in an environment that is not a crisis”, he said told reporters.
“There is general agreement that should the situation worsen considerably, there needs to be a discussion on what should we do collectively or in a coordinated manner, but this is not what we would do today”, the official said.
In line with their past commitments, the top G-20 policymakers have agreed to “refrain from competitive devaluations and we will not target our exchange rates for competitive purposes”.
For possible downside risks, China still has the space and tools for monetary easing, central bank governor Zhou Xiaochuan said.
Global financial policymakers gathered in Shanghai are watching closely for signs that China is ready to tackle economic imbalances they see standing in the way of getting China’s economy onto more sustainable footing.
“It doesn’t seem the meeting offers concrete, deliverable or coherent solutions to boost growth”, said Raymond Yeung, senior economist at Australia & New Zealand Banking Group Ltd.in Hong Kong.
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Bank of England Governor Mark Carney voiced skepticism over negative interest rates, which have now been adopted in continental Europe and Japan, and the head of the International Monetary Fund also warned about diminishing effectiveness of monetary policies.
