Global economy 'grim' and G20 must step up to fix it: China

Sat Jul 9, 2016 7:48am EDT
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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 reverberations.

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 told Reuters.

"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 depressed."   Continued...

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