China tries to reassure over economy at G20 meeting

The world’s top 20 economic powers pledged during a ministerial meeting on Saturday to use all policy tools at their disposal to uplift the world’s sluggish economic growth.

What each country does will be dictated by its circumstances, Lou said. “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”.

Overhanging the summit are global concerns about China’s ability to manage its domestic markets and currency and wider restructuring reforms, sources of great anxiety for investors in recent months.

China’s growth fell to 6.9 percent in 2015 – high compared with most other G-20 members but the worst in a quarter of a century and a far cry from the fat years of double-digit increases. The fund also said it may further downgrade the figure when it publishes its next forecast in April.

The G20 communique cited a list of specific risks the world faces, including volatile capital flows, falling commodity prices and rising geopolitical tensions, along with “the shock of a potential United Kingdom exit from the European Union and a large and increasing number of refugees in some regions”.

“We’ll get supportive statements on the growth outlook remaining decent and … we’ll hear that policy options are still available if growth were to take a much more significant dip downwards”, said Alvin Tan, a currency strategist with French bank Societe Generale in London.

“Despite Chinese denials, fears persist that Beijing will allow its currency, the yuan, to decline in value in order to support struggling exporters”.

The policymakers of the leading developed and developing economies discussed how best to tackle the capital outflows, which have accelerated after the USA central bank ended seven years of near-zero interest rates in December, according to the G-20 officials.

On exchange rates, the G-20 reaffirmed that “we will refrain from competitive devaluation and we will not target our exchange rate for competitive purposes”.

Just a few hours before G-20 finance ministers and central bankers were scheduled to grapple with mounting headwinds to the global economy, Schäuble doused those hopes.

Chinese Premier Li Keqiang has expressed the country’s confidence in handling the complex economic situation both at home and overseas.

He also said that governments needed to step up the pace of economic reforms. He insisted governments had to embrace reforms instead.

“There is always more that can be done”, he said, adding: “It will have to be designed in a very proper way to… have the effects we need on economic growth”.

The Shanghai meeting concluded that a possible vote to withdraw “is among the biggest economic dangers this year”, Osborne said.

China has sought to reassure global finance ministers about the state of its slowing economy.

Speaking as the G20 meeting of central bank governors and finance ministers kicked off in Shanghai, central bank governor Zhou Xiaochuan sent a message of confidence and repeated earlier reassurances the country would not stage another devaluation of its currency to support the economy.

Notably absent from the communique was explicit concern over China’s economic direction.

Chief of Germany’s Federal Bundesbank Jens Weidmann, second from left, listens to International Monetary Fund Managing Director Christine Lagarde, right, after a family photo of the G20 Finance Ministers and Central Bank Governors Meeting at the Pudong Shangri-la Hotel in Shanghai, China, Saturday, Feb. 27, 2016.