In China meeting, G20 has chance to soothe post-Brexit jitters

Wed Jul 20, 2016 6:43am EDT
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SHANGHAI (Reuters) - Finance heads from the world's leading economies will confront fresh fears about protectionism when they meet in China this weekend, with Brexit fallout and dwindling policy options to boost global growth expected to dominate talks.

The Group of 20 finance ministers and central bankers meeting will put the spotlight on Britain's new Chancellor of the Exchequer, Philip Hammond, who makes his international debut at the gathering and will need to answer questions about how London will manage its exit from Europe.

Also overhanging the G20 meeting in the southwestern city of Chengdu will be Donald Trump's U.S. Presidential campaign in which protectionist themes are expected to be central, after his official nomination as the 2016 Republican candidate this week.

"(On Brexit), the focus will be on what message G20 can deliver to ease concerns," said an Asian financial official involved in G20-related issues. "We still need to remain vigilant."

The International Monetary Fund this week cut its forecast for global growth, specifically on Britain's vote to leave the European Union.

A South Korean finance ministry official said "expanded downside risks to global economic growth" post-Brexit would feature in the Chengdu talks.

"With everything aside, talk about strengthening cooperation regarding monetary, fiscal and macro policy to recover global growth will be essential," said the official.

Noting the growing public backlash against trade and globalization, a senior U.S Treasury official said the G20 needed to focus on ensuring the benefits of global trade and cooperation were shared broadly among their citizens.

"We also need to do a better of job of explaining why this cooperation is important to the lives or our citizens in terms of jobs, economic growth and stability," the Treasury official said.   Continued...

Police cars and other vehicles, which will serve during the upcoming G20 summit, are seen at a parking area in Hangzhou, Zhejiang province, China July 18, 2016. Picture taken July 18, 2016. REUTERS/Stringer