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2016年2月29日 (月)

G20と政策協調 市場安定へ行動が求められる

The Yomiuri Shimbun
G-20 nations must coordinate policies to stabilize global financial markets
G20と政策協調 市場安定へ行動が求められる

Can the current turmoil in global financial markets be contained by the latest moves of the Group of 20 countries? The developed and emerging market economies must coordinate their policies effectively to achieve this goal.

A conference of the G-20 finance ministers and central bank governors ended on Saturday. A joint communique adopted at the conference included the grim perception that “Downside risks and vulnerabilities have risen” for the global economy.

Based on this recognition, the G-20 countries expressed their strong resolve in the communique to “use all policy tools — monetary, fiscal and structural — individually and collectively” to check the global economy from stalling.

The world economy has been shrouded in a number of destabilizing factors, such as the slowdown in China’s economic growth, a drop in crude oil prices, and capital flows out of emerging market economies in the wake of the recent U.S. interest rate hike.

It is noteworthy that the G-20 countries shared a sense of alarm and came up with a stance of jointly tackling these challenges to realize market stabilization.

The G-20 countries agreed on the view that excessive movement in exchange rates can adversely affect the world economy. They also reaffirmed that they will refrain from competitive devaluations of currencies to promote their exports. The communique thus took into consideration the concern in the market over the yen’s excessive rise and China’s devaluation of the yuan.

The focal point of the conference was whether China, chair of the conference and a country reckoned to be the epicenter of market confusion, can send an effective message to calm the market turmoil.

Trying to calm fears

People’s Bank of China Gov. Zhou Xiaochuan sought to ease the distrust of the market by saying at a press conference, among other things, that the bank would take additional monetary-easing measures. The press conference was, unusually, held ahead of the opening of the G-20 conference. Chinese Prime Minister Li Keqiang also made clear the country’s policy of promoting structural reforms.

However, just emphasizing a reform-promoting stance will not be enough to eliminate deep-rooted concerns about China’s economic prospects. The country will be required to specify the policy course it will take.

It is reasonable that Finance Minister Taro Aso said, “Chinese authorities need to present a structural reform plan with a concrete schedule.”

In dealing with challenges such as reducing excess production capacity and reorganizing state-owned enterprises, the ability to act to carry through painful reforms is vitally needed.

It is also appropriate that the communique clearly stated, “We will clearly communicate our policy actions to minimize negative spillovers,” apparently taking into account such countries as the United States, which is exploring ways to make an additional interest rate hike.

We hope G-20 countries make policy decisions carefully by also paying attention to the possible ill effects of interest rate hikes, such as an exodus of capital from emerging economies.

The vulnerability of Europe’s financial system was also taken up for discussion at the conference. European countries need to throw their energy into accelerating their disposal of nonperforming loans and implementing structural reforms to vitalize their economies.

Japan explained to other G-20 countries that it will get the nation out of deflation with its negative interest rate policy. It is imperative to realize an economic recovery led by domestic demand while pushing through growth strategies.

(From The Yomiuri Shimbun, Feb. 28, 2016)


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