CHINESE MEDIA’S PERSPECTIVE OF G20 FINANCE MINISTERS AND CENTRAL BANK GOVERNORS’ MEETING – ANALYSIS (SOURCE- EURASIA REVIEW, AUTHOR- NURZHANAT AMETBEK)
 |
| Image credits- Wikimedia Commons / Various Authors |
Source- The Eurasia Review
Author- Nurzhanat Ametbek
Turkey hosted the G20 finance ministers and central bank governors for the first time since it assumed the rotating presidency of the elite global club. Officials gathered in İstanbul, Turkey from February 9-10 to discuss solutions to the debt crisis in Greece and ways to push forward faltering global growth.
The meeting of the G20 finance ministers and central bank governors coincides with a time of global economic suffering and hardship that is characterized by uneven growth of the major economies, monetary policy differentiation, and the Greek question in Europe. During the meeting, G20 members tried to come up with a coordinated plan to reverse the current downturn of the global economy, pledging to continue to take action to boost economic growth. Nonetheless, the G20 members still hold divergent opinions on various issues including what kind of policy tools are the most appropriate to achieve their goals and how to deal with Greece’s debt crisis.
On the day of the meeting, the United States urged countries not to devaluate their currencies to stimulate exports. This indicates that Washington will vigilantly stand with its allies in an effort to support economic growth by maintaining and stabilizing exchange rates. US Secretary of the Treasury Jacob J. Lew admitted last week that America alone cannot be the sole engine of global economic growth. The United States hopes that the G20 meeting in İstanbul will urge Europe to take on more responsibility in this regard.
President of the International Monetary Fund (IMF) Christine Lagarde released a blog post before the meeting, stating, “There is a lot at stake. Without action, we could see the global economic supertanker continue to be stuck in the shallow waters of sub-par growth and meager job creation.” Her words point to the difficulties currently being faced by the economies of the G20 in creating and expanding new jobs, while her words also indicating that high rates of unemployment will further drag on the world economy as a whole.
The Organisation for Economic Cooperation and Development (OECD) claimed on February 9 that in recent years, G20 governments did not implement the fundamental reforms needed for the promotion of economic growth; thus there is still doubt as to whether or not the G20 will be able to deliver on its promise to increase global economic output.
The OECD’s most recent annual report Going for Growth warned that the growth potential of most developed economies has weakened, and that other economies have been facing long-term stagnation.
The slowdown of China’s economic growth is a foregone conclusion. According to official data of the Chinese authorities, the 2014 economic growth rate of the country reached its lowest level in 24 years. The latest economic figures from the Chinese mainland are not so optimistic either. According to Chinese customs statistics, in January, Chinese exports fell 3.39% from the previous year, while imports declined by 19.9%.
In addition, the collapse of state-owned enterprises and the plight of the real estate market in China has become an undeniable reality. Although doubts have been expressed about the accuracy of relevant economic data, it is generally accepted that China’s economy is experiencing massive downturn.
The fall in the prices of oil has both positively and negatively affected the Chinese economy. On the one hand, the fall in oil prices has caused greater economic slowdown and a rise in unemployment in the country; yet, on the other hand, it has also granted national monetary and fiscal policies a certain amount of respite.
In Europe, economic woes of some EU member states pose numerous risks to the Eurozone. In addition to the devaluation of the Euro, the stagnation of economic growth in the Eurozone and the recent rise to prominence of an anti-austerity party in Greece will lead to further uncertainty for the economy of the monetary union.
Furthermore, the approaches to economic reform adopted by emerging countries such as Brazil, India, and Turkey are still insufficient. Here, reform is limited and outside investment is badly needed. Nonetheless, it is difficult to fully meet these needs with the current oscillation of currencies across the globe.
The state of the global economy is unstable, the oil and stock markets are rapidly fluctuating, Chinese economic growth is slowing, and it is unclear whether or not the United States can lead the way in these economically tumultuous times. These were the major headings that the G20 finance ministers and central bank governors discussed in İstanbul. With the G20 trying to feel the pulse of the world economy, coordination of the member states to promote global economic growth will be key.
Comments