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Published On: Sun, Sep 4th, 2016

China’s Xi at G20 says world economy at risk, warns against protectionism

HANGZHOU, CHINA – The global economy is being threatened by rising protectionism and risks from highly leveraged financial markets, Chinese President Xi Jinping said at the open of a two-day summit of leaders from G20 nations.

His warning on Sunday followed bilateral talks with Barack Obama that the U.S. president described as “extremely productive”, but which failed to bring both sides closer on thornier topics such as tensions in the South China Sea.

With the summit taking place after Britain’s vote in June to exit the European Union and before the U.S. presidential election in November, observers expect G20 leaders to mount a defense of free trade and globalization and warn against isolationism.

The global economy has arrived “at a crucial juncture”, Xi said, in the face of sluggish demand, volatile financial markets and feeble trade and investment.

“Growth drivers from the previous round of technological progress are gradually fading, while a new round of technological and industrial revolution has yet to gain momentum,” he said.

G20 countries are set to agree in a communique at the end of the summit that all policy measures – including monetary, fiscal and structural reforms – should be used to achieve solid and sustainable economic growth, Japanese Deputy Chief Cabinet Secretary Koichi Hagiuda said.

“Commitment will be made to utilizing all three policy tools of monetary and fiscal policies and structural reforms to achieve solid, sustainable, balanced and inclusive growth,” Hagiuda told reporters on the sidelines of the summit.

Xi also called on G20 countries to match their words with actions.

“We should turn the G20 group into an action team, instead of a talk shop,” he said.

But some of the G20 leaders have begun drawing battle lines in disputes over issues ranging from trade and investment to tax policy and industrial overcapacity. – Reuters