CHINA: G20 ministers grapple with risks facing the global economy, including high oil prices and protectionism

Record ID: 872544

  • Title: CHINA: G20 ministers grapple with risks facing the global economy, including high oil prices and protectionism
  • Date: 15th October 2005
  • Summary: CHINESE FINANCE MINISTER JIN RENQING SPEAKING
  • Embargoed: 30th October 2005 12:00
  • Keywords:
  • Location: China
  • City:
  • Country: China
  • Topics: International Relations,Finance
  • Reuters ID: LVA9DCSPRH8Z49ZDS7N8M8EUZRWU
  • Aspect Ratio:
  • Story Text: Finance ministers and central bank governors from the G20 nations gathered in China on Saturday (October 15) to discuss ways to preserve international economic A draft statement under discussion vowed to take any policies necessary to address high oil prices and other risks facing the global economy. Imbalances in the global economy and rising protectionism exacerbated uncertainties and aggravated vulnerabilities, the draft said.
    World Bank President Paul Wolfowitz, also attending the talks, called on rich countries to make painful concessions in world trade talks. Wolfowitz said the talks would fail unless all countries gave ground to reach an outline deal at a meeting in Hong Kong in December of the 148 member nations of the World Trade Organisation.
    "I'd like to be very clear. Unless serious concessions are made by all sides, developing countries as well as developed countries, Europe, the United States, Japan, everyone - unless serious concessions are made by everyone, the Doha round talks will fail, and the people who will suffer the most are the poor people of the world," Wolfowitz told reporters.
    Oil was a key focus with the draft statement, urging cooperation to stabilise oil prices and improve production and refining capacities.
    Crude oil prices topped $70 a barrel at the end of August and have been generally trading between $60 and $70 since then.
    At a news conference, International Monetary Fund Managing Director Rodrigo Rato urged action. "We believe from the point of view of supply, that both consumers and producers can do better efforts in terms of more investment and production but certainly in refinery capacity. And there has to an important effort to make the market more transparent and in that respect, I certainly welcome the initiatives that have been announced today by Saudi Arabia to hold a conference about the transparency of the oil market in Saudi Arabia," said Rato.
    Rato said the world economy would grow 4.3 percent in 2006, but high oil prices would remain a threat to growth. "We certainly advise countries to pass to consumers the optimal level of prices, reduce subsidies, and substitute subsidies by direct social policies," said Rato.
    Risk also lay in global imbalances, the key symptoms of which were high current account deficits in the United States and corresponding surpluses in Japan, China and other Asian emerging market economies, he said. Rato said China had indicated it would move towards a more market-driven exchange rate mechanism in the future. The G20 meeting will wrap up on Sunday (October 16).
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