Two closely watched G20 meetings held Sunday in Japan discussed escalating economic and trade friction and downside risks to the global economy, but failed to reach a consensus against protectionism due to U.S. obstruction.
The G20 Finance Ministers' and Central Bank Governors' meeting was held in Fukuoka, while ministers from G20 countries also wrapped up a two-day meeting on trade and digital economy in Tsukuba on Sunday.
The G20 finance ministers and central bank governors expressed their concerns over the economic and trade frictions in Fukuoka.
Japanese Finance Minister Taro Aso said that the uncertainty over the prospects of the U.S.-China trade talks were worrying and would further undermine international market confidence if the issue was not resolved.
At the suggestion from the Japanese side, the current account imbalance, including services trade and investment income, was discussed at the meeting in addition to the imbalance in goods trade.
Participants of the meeting agreed on the need to look at all the components when assessing external accounts, as well as the need for countries to implement macro-economic and structural policies tailored to their own circumstances.
During the discussions, the ministers agreed that it was important to work together to correct imbalances.
The world economy will stabilize in the second half of this year and pick up next year, according to a ministerial statement issued after the Fukuoka meeting.
However, the statement also noted that the world economy still faces downside risks, particularly trade risks and geopolitical risks which continue to increase.
As the G20 Osaka summit is to be held on June 28, it is highly anticipated that whether the G20 economies can show solidarity to the world in tackling the risks of global economic downturn.
In addition, a ministerial statement issued after the meeting on trade and digital economy in Tsukuba said it was necessary for the G20 members to take action to strengthen the dispute settlement mechanism of the World Trade Organization.
The statement also said the expansion of trade and investment is an important factor in promoting economic prosperity and sustainable growth, and the risks in the current trading environment could slow the growth of the world economy.
Regrettably, the meeting failed to include the part of opposing trade protectionism in the ministerial statement due to objections from the U.S. side, thus it only expressed concerns about the trade friction in the Chairman's Statement prepared by the Japanese side.
Yi Gang, governor of the People's Bank of China, met with U.S. Treasury Secretary Steven Mnuchin on Sunday on the sidelines of the G20 Finance Ministers and Central Bank Governors' meeting.
The two sides exchanged views on the global economic and financial situation, G20 affairs and other issues of common interest.
Japanese scholars and economists generally believed that the economic and trade frictions may not subside in a short term, and how to manage the differences tests the wisdom of all sides.
As the world's largest economy, the United States should take responsibility for the world economy and it should not allow trade frictions to hurt the world economic development, according to Japanese experts.