By ETF Heat Map Team
In a speech delivered by the Chinese president, Xi Jinping during the opening remarks of the G20 summit. He expressed concerns about how protectionism policies and the increased risk from the influentially volatile and highly leveraged financial markets serve as a threat to the future of global economy and how such factors could potentially impede global economic growth.
These concerns were made public and came after holding bilateral talks with the U.S. president Barrack Obama. According to Obama, the talks were productive despite them not striking an agreement over sensitive issues such as the high tensions experienced in the South China Sea. Our president arrived on Saturday and got into discussions with Xi, which proceeded late into the night. He advocated for Beijing to defend its legal obligations as far as the disputed South China Sea waters were concerned, and emphasized on the U.S. obligation to its regional counterparts.
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Xi on the other hand affirmed that China would not stop safeguarding its dominion and maritime obligations in the South China Sea. However, Xi strategically ensured that the main agenda of the G20 summit would be the economic issues being experienced globally and how to stimulate economic growth. This was to prevent other disagreements from overshadowing the main agenda of the summit.
Observers at the summit, which was held after the Brexit referendum in June and prior to U.S.’s upcoming presidential elections slotted for November, expected the G20 members to put up a defense to argue in favor of globalization and free trade, and give a warning against isolationism.
Xi expressed his concerns over the global economy getting to a crucial point in time where it is characterized by slow-moving demand, unpredictable financial markets, and weak trade and investments. He went ahead to add that the drivers which propelled growth previously such as technological progress are fading away, and another revolution on technology and industrial innovations to quicken the drive of future economic are yet to be fully established and realized.
Jean-Claude Juncker, the European Commission President, expressed his concerns over the issue of industrial overcapacity in China stating that it had reached unacceptable levels. According to him, this problem had caused a massive loss of employment in the European steel industry and he urged the Chinese government to do something about it.
By the end of the summit all members are expected to agree in a statement that all suggested global economic guidelines concerning the active use of monetary policies, structural reforms, and fiscal policies should be used to attain a stable, well balanced, sustainable and all-inclusive economic growth as indicated by the Japanese Deputy Chief Cabinet Secretary Koichi Hagiuda.
President Xi urged the G20 participants to stick to their word and to match their words and commitments with real actions. However, some of the members are already drawing battle lines in disagreements over issues such as trade and investment, industrial over production, and taxation policies.
The other leaders present at the summit, which took place in the Eastern city of Hangzhou, included Theresa May from Britain, Vladimir Putin from Russia, Francois Hollande from France, Shinzo Abe from Japan, Angela Merkel from Germany and Narendra Modi from India.
The G20 talks will proceed in hopes of setting a global economic agenda and growth trajectory by discussing how to overcome the current issues affecting global trade and role of the volatile financial markets in order to establish new metrics and factors that will drive the global economy forward.