China talks up growth agenda at G20 amid lack of wider policy unity
SHANGHAI – China sought to restore global confidence in its economy on Friday as financial leaders from G20 nations gathered in Shanghai against a backdrop of worsening economic conditions and a lack of wider consensus on how to fix the problems.
While the health of the world’s second-largest economy, which hosts the G20 presidency this year, will be a key talking point at the two-day summit, the threat of the UK leaving the European Union and its political and economic implications have also surfaced as concerns at the meeting.
Finance ministers and central bankers meeting in Shanghai have called for better policy coordination to counter a stuttering global economy and wobbly financial markets, but disagreed about what steps to take.
China’s central bank governor sent a message of confidence in remarks on Friday morning and repeated earlier assurances the country would not stage another devaluation of its currency, the yuan CNY=CFXS, to support the economy. He also sought to manage expectations around the speed of China’s economic reform agenda.
“China will strike a balance between growth, restructuring and risk management,” People’s Bank of China (PBOC) Governor Zhou Xiaochuan said in English at a conference held by the Institute of International Finance (IIF) in conjunction with the G20 meeting.
“While the reform direction is clear…the pace will vary, but the reform will be set to continue and the direction is not changed.”
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.
US Treasury Secretary Jack Lew and others have urged Beijing against devaluing the yuan again, as it did in August, and called for better policy communication from Beijing.
Zhou said China had monetary policy wiggle room, a statement echoed on the fiscal side by the finance ministry. On Thursday, vice finance minister Zhu Guangyao said Beijing could increase its fiscal deficit, with one PBOC researcher writing in an article that the deficit could exceed 4 percent this year. -Reuters