Finance ministers discuss coordinating fiscal policy at G20

G20 Summit

Finance ministers discuss coordinating fiscal policy at G20

Just two days before the G20 summit, finance ministers from the world’s major economies are set to gather and discuss ways to boost global economic growth and plans to better coordinate monetary and fiscal policies.

CCTV’s Ming Tian reports.

China’s Vice Finance Minister Zhu Guangyao said world economies have shaken hands on two major issues. “First we asked governments to use comprehensive policies, monetary, fiscal, and structural, to boost growth,” Zhu said. “The second thing is to talk closely with each other on foreign exchange rates. If approved, this would be the first time in history that G20 had such a policy consensus.”

During the hour-long session, Zhu opened the floor to a number of questions, including China’s efforts to cut industrial overcapacity. “China is the first major economy to cut its overcapacity in steel and coal. We have the strongest policy. Overcapacity is a global issue, and the root cause is slowing growth worldwide,” said Zhu.

“We ask world powers to work together more and blame each other less, and to take more action and make less lip service,” Zhu added.

Among the themes of this year’s summit is letting more developing countries take part in global governance. And Zhu said China is leading the way.

This year’s summit will be the most representative of developing countries in the G20 history. As the G20 Hangzhou summit proceeds, China hopes countries could reach agreement in dealing with issues concerning global growth.

China takes the wheel of financial governance

As this year’s G20 host, China wants to take a greater role in how the global financial system is run.

As CCTV America’s Owen Fairclough explains, it might be a difficult moment now to do so.
Follow Owen Fairclough on Twitter @owefair

Lehman Brothers set off a worldwide recession that wiped out more than $19 trillion, around one-third, of the world’s total economic output.

Compare that with China which contributes nearly one-fifth of global economic output. And its contribution to global growth is nearly 40 percent. This is one country all by itself. And even if growth is cooling, its contribution still keeps getting bigger and bigger.

Since the most recent financial crisis, advanced countries have tried to regulate banks and stock markets to prevent another meltdown. China admits it’s taken a back seat in this effort.

But now it wants to take the wheel. And it’s obvious why it wants to be more involved. China’s trade routes span the globe and it’s connecting the dots with its 21st century Silk Road called “One Belt, One Road” that aims to accelerate trade between Asia to Europe.

China’s Renminbi (RMB) or Yuan now stands with the dollar and Euro as a global currency. Its capital is flowing around the planet. China has even launched a development Bank for vast parts of Asia.

China is doing all this, however, at a time of growing protectionist, anti-global sentiments. UK is leaving a giant free trade area, the European Union. And both Donald Trump and Hillary Clinton want to give up on a huge free trade deal linking Pacific countries.

So China’s biggest obstacle in taking a greater role in global financial governance may be the world’s advanced economies where more and more people want to retreat from global trade.

Charles Freeman on G20 summit

For more on the G20 Hangzhou summit and China’s potential role in global economic growth, CCTV America’s Rachelle Akuffo spoke to Charles Freeman, international principal at Forbes-Tate.