In a conference of the Institute of International Finance, held parallel to the G20 meeting, PBOC Governor Zhou Xiaochuan was, however, at pains to alleviate concerns that China might adopt policies which would cut across the efforts made by other countries, such as competitive devaluation. China, he said, had no plans to take aggressive and disruptive action on currency values. He also endorsed Finance Minister Lou Jiwei's emphasis on the primacy of structural reform, saying, "China will strike a balance between growth, restructuring and risk management. While the reform direction is clear... the pace will vary, but the reform will be set to continue and the direction is not changed."

Zhou also stressed the importance of a sensible interest rate policy in the management of risk. China, he said, would gradually develop an "interest rate corridor," providing a limited range within which rates might be adjusted. Concerns on interest rate policy were recently sharpened by Japan's decision to introduce a negative interest rate, which was regarded with perturbation by some of the Finance Ministers present.

It was hardly to be expected that any instant solutions would emerge from the Shanghai meeting. The world economy is too complex and multi-faceted for any single policy to cover all angles. There will also be slight differences between the situations and needs of different parts of the world. Although the G20 nations are broadly the furthest developed economies, their levels of development are not identical. Thus, there are limits on what can be expected from such a broad-based forum. Nonetheless, there is an obvious place for close coordination among the most influential global players. They all agreed on the basic policy goal of strong, sustainable and balanced groups, and that all policy tools, fiscal, monetary and structural, need to be employed to achieve this goal. If this continues, moderate growth could be expected in most advanced economies, and stronger growth in key emerging market economies. Altogether, a reasonably upbeat, though not over-optimistic interim report, which will come under further scrutiny in the run-up to the next item on the G20 programme, the Hangzhou Summit, which will take place Sept. 4-5 centered on the theme "Towards an Innovative, Invigorated, Interconnected and Inclusive World Economy".

The writer is a columnist with China.org.cn. For more information please visit:

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