G-20 Summit: Economic Risks Have Risen Globally
In one of the biggest news items from the weekend's G-20 Summit in Shanghai—a meeting of leaders from the world’s 20 leading economies—chinese officials announced that the country will not devalue the yuan.
China's currently enduring the slowest economic growth rate in a quarter-century, fueling global anxieties of a significant yuan devaluation. But that won't happen, central bank chief Zhou Xiaochuan says. "There is no basis for persistent [yuan] depreciation,” he told a forum of investors.
While US Treasury Secretary Jacob Lew was pleased with China’s pledge, there were other concerns voiced over the weekend. The G-20 cited volatile capital flows, falling commodity prices and the UK’s potential EU exodus as major threats that could tip the world economy into recession, the Wall Street Journal reports.
The G-20 says countries should explore increasing spending but fell short of adopting calls by the IMF for a coordinated stimulus package.
Circling back to the yuan, Chinese officials stopped just short of saying it wouldn't lose value, saying only they aren't pursuing a devaluation. In addition, Chinese officials cite the country’s $3T plus pile of foreign currency as a major source of stability for the struggling economy. [WSJ]