Global economy 'grim' and
G20 must step up to fix it: China
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[July 09, 2016]
SHANGHAI (Reuters) - The global
economic situation is grim and major economies must lead the way in
tackling problems including sluggish growth and weak trade, China's
trade minister Gao Hucheng said on Saturday.
Gao made the remarks at the start of a two-day meeting of trade
ministers from G20 economies in Shanghai, as uncertainty hangs over the
outlook for a slow-growing global economy now beset by post-Brexit
The global economic recovery remained "complicated and grim", Gao said.
"Global trade is dithering, international investment has yet to recover
to levels before the financial crisis, the global economy has yet to
find the propulsion for strong and sustainable growth.
"In the current circumstances, the international community expects the
G20 to show leadership in resolving the prominent problems we are facing
and inject impetus for recovery and growth," he said.
In April, the International Monetary Fund cut its 2016 global growth
forecast for the fourth time in a year, to 3.2 percent from 3.4 percent,
amid weakening global demand and geopolitical risks. A fifth straight
global growth markdown by the IMF looks almost certain.
The World Trade Organization (WTO) expects 2016 to be the fifth
consecutive year of less than 3 percent growth in global trade, and
Director-General Roberto Azevedo said on Friday trade would remain
sluggish going into the third quarter of the year.
The ministers meeting in Shanghai were likely to agree to a set of
non-binding principles to enhance investment as well as a declaration on
protectionism, South Africa's Minister for Trade and Industry Rob Davies
"The bigger context of course is there has been a very sharp reduction
in trade growth," he said. "We heard from the WTO today that it has been
well below the rates of GDP growth, which are in any case fairly
The specter of protectionism also hangs over the meetings in Shanghai.
China's huge but struggling steel sector has relied on exports to offset
the impact of slowing domestic demand, but it has been accused of using
unfair pricing to push foreign competitors out of business.
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China's Commerce Minister Gao Hucheng (2nd L) attends the opening
ceremony of the 2016 G20 Trade Ministers Meeting in Shanghai, China
July 9, 2016. REUTERS/Aly Song
Chinese trade officials have repeatedly stressed that the country has been the
victim of overzealous anti-dumping actions by foreign countries, which fail to
take into account Chinese efficiency or its low labor and production costs.
Davies said ministers had not yet reached consensus on how to handle
overcapacity and rising protectionism in the steel sector, which remains a
"It's not that it is not important, but a number of us don't feel a
comprehensive discussion has taken place ... A lot of the European countries and
the United States want to see something, but what exactly is going to be said is
still an issue."
Uncertainty over Britain's vote to leave the European Union will dampen
near-term economic growth for Britain and the rest of Europe and will affect
output globally, according to the IMF.
British and EU representatives in Shanghai on Saturday were at pains to stress
that they would come up with a "sensible and mature new arrangement", Davies
(Reporting by David Stanway and John Ruwitch; Editing by Ed Davies and Catherine
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