China sought to restore confidence in its economy as financial leaders from G20 nations gathered in Shanghai on Friday, and Premier Li Keqiang urged greater global coordination and consideration of policy spillovers.
But Germany appeared to all but rule out coordinated stimulus to counter a deepening global chill, and U.S. Treasury Secretary Jack Lew said there was no need for a crisis response, as in 2009 when the Group of 20 (G20) major economies agreed on coordinated stimulus to prevent a worldwide depression.
While the health of the world’s second-largest economy, which hosts the G20 presidency this year, is a key talking point around the two-day summit, the threat of the UK leaving the European Union and its political and economic implications have also surfaced as concerns among participants in the meeting.
“Macroeconomic policy coordination needs to be strengthened. The global economic and financial situation may have become more grim and complex. It is time for countries to stand together to tide over difficulties,” Li said in a video message at the opening of the meeting.
Several other policymakers have urged better coordination, but there was disagreement about what steps to take, making it unlikely that concrete action points will emerge from the meeting.
“Talking about further stimulus just distracts from the real tasks at hand,” Germany’s Minister of Finance Wolfgang Schaeuble said, rebuffing a recommendation from the International Monetary Fund (IMF) that the G20 should start planning now for a coordinated stimulus program.
“We, therefore, do not agree on a G20 fiscal stimulus package as some argue, in case outlook risks materialize.”
Lew had a similar message, saying there was a great deal of economic uncertainty at present but no crisis.
“It would not be reasonable to expect a crisis response in an environment that is not a crisis,” he said told reporters.