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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– Recognize monetary policy will continue to support economic activity and ensure price stability but it alone can not lead to balanced growth.
Investors anxious about the risk of a new global recession are hoping that data over the coming week will show that some momentum remains in the world economy, eight years into its slow recovery from the financial crisis.
Speaking in Hong Kong, French Finance Minister Michel Sapin said it was best for the United Kingdom to remain in the European Union, and expects the British people would make the “right decision” at a June 23 referendum to remain a bloc member.
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.
“While recognising these challenges, we nevertheless judge that the magnitude of recent market volatility has not reflected the underlying fundamentals of the global economy”, the communique said.
Adding to these headwinds are concerns about the impact of China’s economic rebalancing, along with signs of distress in other emerging markets, due to plummeting commodity prices, the International Monetary Fund said.
“While the reform direction is clear, managing the reform pace will need windows of opportunity and conditions …”
Japan’s central bank stunned investors by adopting negative interest rates last month.
“The debt-financed growth model has reached its limit”, Schaeuble told an event hosted by the IIF global finance industry association. “It is even causing new problems, raising debt, causing bubbles and excessive risk taking, zombifying the economy”, said Schaeuble. “China must refrain from policies that would be destabilising and create an unfair advantage.”- US Treasury Secretary Jack Lew encourages Beijing to shift to a more market-oriented exchange rate.
They were also having last-minute discussions about whether to incorporate a sentence saying, “We will consult closely on exchange markets”, according to officials involved in the G-20 meeting.
And Japan’s Finance Minister Taro Aso shrugged off calls from some quarters for Tokyo to roll out fresh fiscal stimulus.
The G20 summit has got underway in China.
China still has room to expand fiscal policy to push structural reforms, he said, predicting an increase in budget deficit this year.
Beijing said it would not devalue the yuan further after lowering its exchange rate last August, Reuters reported.
Other G20 leaders have been quick to talk down the case for further policy stimulus amid rising debt levels and extremely low interest rates.
“The space is evolving and changing and countries keep delaying their necessary reform agenda and that might undermine the space for the reform, so they might be standing at the edge of a cliff and have two options – either you fall over the cliff, or you push forward a very painful reform process”.
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“Chinese authorities need to present a mid-term structural reform plan with concrete schedule and a package of measures to stabilize yuan, based on recognition that communication between Chinese authorities and markets has caused market volatility and capital outflows”, he told reporters.
