But she said it wasn’t an either-or choice: Reforms need not preclude coordinated stimulus spending. “I would be surprised if you had universal agreement on coordinated monetary and fiscal policy”. The global economic and financial situation may have become more grim and complex.
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“Macroeconomic policy coordination needs to be strengthened.
Fiscal policy? Reform?” said Richard Jerram, the chief economist at Bank of Singapore Ltd. “After six or seven years of trying to promote recovery there is no appetite for fiscal stimulus, and no easy or obvious reforms that have been neglected”.
U.S. Treasury Secretary Jacob Lew warned earlier against expecting a “crisis response in a non-crisis environment”.
“As the host country of the G20 this year, China proposes a system to evaluate structural reform among member economies and that certain areas should be prioritized to speed up structural reform”, said Lou Jiwei, Chinese Finance Minister.
Recent depreciation of the yuan against the US dollar has sparked concerns that the Chinese economy is still slowing.
“China has always opposed competitive currency devaluations as a way to boost export competitiveness”, he said.
“China will strike a balance between growth, restructuring and risk management”, Mr Zhou said. “China still has some monetary policy space and multiple policy instruments to address possible downside risks”, Zhou said at a conference in Shanghai, speaking hours before meeting his counterparts from the Group of 20 developed and emerging markets.
“While the reform direction is clear… the pace will vary, but the reform will be set to continue and the direction is not changed”.
The Chinese central bank (PBOC), meanwhile, said on Friday keep “some leeway” to further ease monetary policy.
Financial policymakers of the G20 economies also reiterated that they will consult closely on exchange rate policy, adding that excess volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability.
Finance Minister Wolfgang Schaeuble says the debt-financed growth model has reached its limits. Germany’s finance minister ruled out taking part in a new joint stimulus effort.
He made the remarks in a video message to the ongoing G20 Finance Ministers and Central Bank Governors Meeting in Shanghai.
The draft communique also recognises the challenges posed to the world economy by geopolitical turmoil, and recognised risks from Britain possibly leaving the European Union in a so-called “Brexit”, along with the EU’s mounting refugee crisis.
Beijing’s seemingly haphazard economic policymaking has undermined market confidence at home and overseas.
Asked about the German stance, he said that some countries may be “reluctant for historic, cultural reasons, which can be understandable… but today we are in an economic situation which requires all the policy tools that exist to be used”.
Among the focus of the meeting is the exchange rate mechanism. “It will stay basically stable on an adaptable and equilibrium level”.
A warning against the current in the G20: face darkening economic conditions and market nervousness, the major central banks are summed instead of using their full firepower.
“For the members of G20, they should go bold, go broad and go together”, said Christine Lagarde, managing director of the International Monetary Fund, at a press conference on Saturday.
The holder of this year’s G20 presidency is China, the world’s second-largest economy, but its slowing growth has roiled global markets and sent prices of some commodities such as base metals plunging, leaving producer nations facing a bleak outlook.
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