Xiao Jie, Chinese Finance Minister, warned that policy uncertainties and the rise of protectionism could restrain the momentum seen in the global economy. Xiao has just attended G20 Summit last week.
The Group of 20 (G20) is the key forum for financial cooperation in financial and economic issues. It consists of 19 countries, including China, and the European Union. The group’s decisions are influential, helping in bringing reforms in both national and multinational levels.
The meeting included a gathering in the German resort town of Baden-Baden. After the gathering, the G20 finance ministers and central bankers released a statement dropping the pledge to keep a free and open global trade, agreeing to an increasingly protectionist United States.
Instead, the leaders simply made a token reference to trade in their main statement. They said that the G20 would cooperate to increase the contribution of trade to their economies.
According to a post on the Chinese central bank’s website on Monday, Xiao said that the "markets are currently worried about the uncertain policies of some developed economies, and are concerned that the rise of protectionism could adversely affect the (global) economic recovery."
The Chinese Finance Minister did not give details on the identity of the developed economies.
The current statement of the G20 contradicts what has been agreed upon at the gathering in the Chinese city of Hangzhou in September last year. The leaders, in the previous gathering, had agreed to work harder to build an open world economy, reject protectionism, and promote global trade and investment.
In the same post, People's Bank of China's Governor Zhou Xiaochuan said that the Chinese economy was in good shape overall and restated that the country’s monetary policy would still be prudent and neutral. Zhou was also in Baden-Baden to attend the G20 gathering.
With the changes in policies and the rise of protectionism as announced at the recent G20 Summit, the growth of global economy could be curbed.