Chinese President Xi Jinping said that “China will use the utmost effort and most concrete measures regarding production overcapacity; it walks the walk”.
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“As long as China and other countries allow the problem to be resolved without adopting a drastic approach, the world economy is unlikely to see a V-shaped recovery”, Suehiro added.
Leaders of the Group of 20 key economies concurred on the need for spending to develop quality infrastructure and stressed the importance of currency stability for the global economy in their statement from the two-day summit concluded here Monday.
In the end, the G-20 endorsed setting up a global body monitoring steel overproduction – a result the official said was Europe’s main achievement at the summit.
The economy is recovering, but growth has been weaker than expected and downside risks remain, the communique said. “Excess capacity is a global problem, and the Global Forum will provide an opportunity to help”. China’s growth has created major overcapacity in a number of industries, including steel.
Beijing wants to reduce the glut to pave the way for structural reforms that it hopes can shift the focus of the economy to consumption and innovation, but implementation remains shaky. “This excess capacity and the government interventionist policies that have fueled it are the root cause of the surge of steel imports now being experienced in many of our home markets”, the industry groups said. The group also affirmed its commitment to advocate for free trade and fight protectionism of all forms in trade and investment.
As is typical at these summits, the Leaders of the G20 committed to implement social and structural reforms meant to improve the supply side of economies of the member nations. The leadership is unswerving in its resolve to press ahead with reforms, said Xin Ming, a professor with the Party School of the Communist Party of China Central Committee.
Different kinds of policies which focused on issues such as green finance, intellectual property rights, resource allocation and poverty relief were deliberated on and subsequently passed, in a meeting of the Central Leading group for Deepening Overall Reforms presided on by Xi.
According to him, one of the goals of China’s G20 presidency is to enable the G20 to transform from a crisis response mechanism focusing on short-term policies to one of long-term governance that shapes medium- to long-term policies, and solidify its role as the premier forum for worldwide economic governance.
For foreign delegates, the event reinforced a sense of China’s power, including its capacity to almost empty a city of nine million.
Foreign multinationals have made huge profits in cooperation with Chinese firms in new materials, new-energy vehicles, aircraft components, integrated circuits, old-age care and cloud computing.
Chinese enterprises invested 88.9 billion USA dollars in 155 countries and regions from January to June this year, surging 58.7 percent year on year.
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In a bid to ensure employment and keep the economy stable, local governments are keeping the industries afloat through cheap credit and other forms of support, which in turn leads to lower export prices.
