China has said the G-20 meeting should focus on multilateral solutions to global economic woes, rather than on the problems of any one country.
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Also Friday, the head of the International Monetary Fund, Christine Lagarde, called for faster action on reforms promised at a G-20 meeting in 2014. 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.
US Treasury Secretary Jacob Lew has said G20 finance ministers will not deliver an “emergency response” to the market turmoil this week, as the world was not in crisis mode just yet. Growth is forecast to fall further this year.
Lew said in an interview broadcast Wednesday by Bloomberg Television that the meeting would likely produce “a more stable understanding of what the future may look like”, including greater clarity from Beijing about its plans.
Divisions have emerged among major economies over the reliance on debt to drive growth and the use of negative interest rates by some central banks, such as in Japan.
“The debt-financed growth model has reached its limits”, he said.
Meanwhile, the United States insists that China must step up its reform efforts, effectively halting the race of devaluations in global currency trading.
Continued turbulence in the stock market and yuan depreciation at the start of 2016 did little to disguise what could be a very hard year ahead, putting the country’s economic policies and reform agenda in spotlight at Friday’s meeting.
“Domestic stocks are adding to weekly gains following upbeat reads on U.S. 4Q GDP (fourth-quarter gross domestic product), personal income and spending, and consumer sentiment”, analysts Charles Schwab said in a note to investors.
The finance ministry official said it did not point out China, the hosting country, who has been under fire for sparking a currency battle among the world’s leading economies to boost their exports.
“(There’s a) need to avoid competitive devaluation, that’s competing in a beggar-thy-neighbour way for sharing a pie that’s either frozen or shrinking and it doesn’t lead anywhere good”, he told reporters.
“I don’t hold out a lot of hope”.
China’s slowing growth and the recent American interest rate have triggered capital outflows here and in other emerging economies.
China went on a charm offensive with world financial leaders at the G20 meeting in Shanghai, seeking to shore up confidence in the globe’s second largest economy and find agreement on getting global growth back on track.
Global growth is at its lowest in two years and forecasters say the danger of recession is rising. He noted that it still was among the world’s strongest performances.
Chinese Finance Minister Lou Jiwei said on Saturday deepening structural reforms is the fundamental way to deal with challenges in the global economy, and China was willing to work with G20 countries to contribute to strong, sustainable, balanced global growth. “The Chinese economy will continue to grow at a moderate-to-high pace”.
Yet central bank governor Zhou said Friday that while China wanted to develop its equity markets, it would take time for them to mature.
Asian shares were mostly higher Friday after China’s central bank governor pledged not to devalue the yuan for the sake of export competitiveness.
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Britain’s Chancellor of the Exchequer George Osborne (R) walks toward a seat after shaking hands with Chinese Vice Premier Ma Kai at the Zhongnanhai Leadership Compound in Beijing, China, February 25, 2016.
