G20 Finance Heads Urge End to Imbalance-Fueling Nonmarket Policies

Asheville, North Carolina, Sept. 1 (Jiji Press)–Finance ministers and central bank chiefs from the Group of 20 major economies called for the elimination of nonmarket policies that fuel global imbalances, according to a chair’s statement published after their meeting closed Tuesday. “We agree that countries should take steps to eliminate nonmarket policies and practices that exacerbate imbalances,” the chair’s statement said, apparently referring to the issue of Chinese overcapacity. Beijing objected to parts of the statement, and the finance and monetary chiefs were unable to adopt a joint statement, which requires unanimous support in principle, in their two-day meeting in Asheville, North Carolina. “Countries with excessive and persistent external surpluses should remove distortions that constrain domestic consumption and that result in an overreliance on exports for growth,” the statement said. The call appeared to be a jab at China, which is expanding production with massive subsidies despite slow domestic demand and exporting heavily. U.S. Treasury Secretary Scott Bessent criticized China at a press conference, saying, “Around the globe, we believe that nonmarket-based economies pushing out a never-ending stream of cheap exports are not sustainable.” Japan was represented by Finance Minister Satsuki Katayama and Bank of Japan Governor Kazuo Ueda at the meeting. Katayama said at a press conference that countries’ concerns about Chinese overcapacity and export controls on critical minerals “passed the breaking point.” “The time was ripe” for the chair’s statement to be made, she added. The chair’s statement said that “the global economy has remained resilient in the face of multiple shocks, including ongoing wars and conflicts,” but added that the resolution of ongoing wars and conflicts is “essential to sustaining durable growth,” referring to energy trade disruptions caused by the effective closure of the Strait of Hormuz. “We urge countries to avoid unnecessary export restrictions to ensure global supply chains continue to function normally,” the statement said, in light of Chinese measures viewed as economic coercion such as export curbs on essential minerals including rare earths. It added that “central banks are strongly committed to maintaining price stability,” amid rising long-term interest rates in Japan and other key economies due to inflation and concerns over fiscal deterioration. “We reaffirm our April 2021 exchange rate commitment,” in which G20 members said that excessive currency market volatility has a negative impact on the global economy, the chair’s statement said. END [Copyright The Jiji Press, Ltd.]