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August 16, 2016

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China hopes G20 to spur economic growth

CHINA will propose a joint initiative to revive weak global growth at next month’s meeting of leaders of Group of 20 major economies amid rising protectionist sentiment in the United States and Europe, officials said yesterday.

Speaking at a news conference, a senior Chinese diplomat made clear China wants the September 4-5 meeting to avoid political issues such as territorial disputes in the South China Sea.

The meeting in the eastern Chinese city of Hangzhou comes as an unusually weak global economic recovery is helping to fuel the popularity of US and European political movements that advocate protection for local industries.

Details of China’s proposal still are being worked out but will include reforms aimed at strengthening the global financial system and promoting technological innovation, said Chinese officials.

They gave no indication it might include an economic stimulus. Some investors have expected such a measure but officials at two previous G20 gatherings this year said the timing was wrong, because individual economies face different conditions and need to take actions tailored to their own needs.

The proposal will stress “inclusive growth” to spread economic benefits widely and shore up support for free trade, said China’s Deputy Finance Minister Zhu Guangyao.

He said governments should be on “high alert” to “anti-globalization” sentiments.

“If the people cannot feel the benefits, then this sort of development cannot truly improve people’s lives, and people will have mixed feelings about such development,” he said.

Yi Gang, vice governor of the People’s Bank of China, said the summit will focus on how to stimulate sluggish global economic growth through open, inclusive trade and the development of robust financial markets.

“We need to instill market confidence and ensure there are no competitive devaluations but rather let the market determine exchange rates,” Yi said at the news briefing, adding this would be the first G20 to discuss foreign exchange markets in such detail.

The G20 summit will also discuss how to better monitor and respond to risks presented by global capital flows, Yi said.

Meanwhile, Deputy Foreign Minister Li Baoding made clear China wants to avoid sensitive diplomatic issues.

The consensus among members is to “focus on economic development and not be distracted by other parties,” Li said when asked about territorial disputes in the South China Sea.

“The Hangzhou summit must focus on economic issues,” said Li. “This is what people want to talk about most at the summit.”


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