China 'able to manage risks and grow'

Minister Lou Jiwei (left) and China's central bank governor Zhou Xiaochuan (centre) and People's Bank of China Deputy Governor Yi Gang (right) attending the opening ceremony of the G20 finance ministers and central bank governors meeting in Shanghai,
Minister Lou Jiwei (left) and China's central bank governor Zhou Xiaochuan (centre) and People's Bank of China Deputy Governor Yi Gang (right) attending the opening ceremony of the G20 finance ministers and central bank governors meeting in Shanghai, China on Feb 26, 2016. PHOTO: REUTERS

Group of 20 (G-20) host China has sought to allay fears over the impact of its economic slowdown on the world, saying there are positive signs for growth and it has policy room and tools to manage risks.

As the meeting of finance leaders began yesterday, China's key finance policymakers - central bank chief Zhou Xiaochuan and Finance Minister Lou Jiwei - soothed nerves with reassuring words.

Mr Zhou, at a conference on the meeting's sidelines, said normalcy will return to China's currency and financial markets because of its strong fundamentals. He noted that China's economic structure has been improving under the "new normal" of slower growth as it transitions to a consumption and innovation-driven growth model.

He said the latest economic data gave a positive signal for growth this year, adding that there were ample monetary policy space and tools to deal with potential risks.

Mr Lou said that while China needed to improve its regulatory environment, it has fiscal space to tackle the tough issues it faces, such as the reform process.

At the G-20 meeting, several finance chiefs voiced the need for greater policy coordination to prevent the negative spillover effects of individual nations' policies, but downplayed the need for more policy stimulus like interest rate cuts.

The group is expected to release a joint communique today, declaring its readiness to take action if economic conditions worsen.

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A version of this article appeared in the print edition of The Straits Times on February 27, 2016, with the headline 'China 'able to manage risks and grow''. Print Edition | Subscribe