Mr Lou Jiwei, Chinese Finance Minister

"Seriously address the issues and risks, but do not exaggerate the problem." Chinese Minister of Finance Lou Jiwei thus summarized the consensus of the G20 Finance Ministers and Central Bank Governors Meeting in Shanghai, the first such meeting held under Chinese Presidency of the G20.

According to Minister Lou, the basic judgement of G20 Shanghai meeting was that recent international market volatility does not reflect the global economy fundamentals, with growth in major emerging market economies remaining strong. Mr. Lou believes that such a consensus from G20 ministers will in itself serve as a signal to boost the world economy.

"The international community’s expectations for this meeting were very high. Everyone has been hoping that the G20 and China can play constructive roles. Given that it holds the G20 presidency, China is taking on both a high-profile and a greater responsibility on the international stage." Lou Jiwei said.

Lou noted that the G20 countries agree on the importance of structural reform, and backed two initiatives proposed by China. First, to advance structural reforms in key areas, and second, to establish a system for assessing these structural reforms.

Structural reform in China may have a demonstration effect in the international arena. Minister Lou specifically explained what the Chinese government is currently attempting to achieve. It is vigorously promoting structural reforms, particularly on deregulation and decentralization of executive power. China’s central government has already streamlined hundreds of administrative procedures – administrative services are now offered at the city level, so that necessary approvals can be handled more quickly. Most government procedures can be completed in a few business days, compared to months or even years previously needed. Thanks to such structural reforms and efficiency improvements, small business, entrepreneurship and innovation are flourishing. To highlight this progress on administrative reform, Minister Lou invited other ministers and bank governors to visit the service centers handling these procedures at the city level.

Minister Lou also a enumerated number of policies intended to support Chinese economic growth in short- to medium-long term, including the implementation of tax cuts to promote human-centered urbanization. China is promoting the reform of the household registration (hukou) system, a unified compulsory education system, basic medical services for both urban and rural residents, and a social security system. All these measures are designed to boost employment opportunities and to help migrant workers settle in cities, allowing the labor force to flow in greater accordance with market forces.

On the subject of monetary policy, Minister Lou noted the concern expressed by many countries about the negative impact of low interest rates, and negative interest rates in particular. He suggested that banks’ balance sheet may worsen under such a negative interest rate environment – and, that such rates, if they last too long, could create troubles in the banking system.

"But there is no plan for a so-called “new Plaza Accord” targeting China. Talking of such a concept comes from people who have no idea of the actual discussion at the meeting. There was no such discussion in Shanghai ," Lou stressed. He stressed that while the " Plaza Accord" was institutional arrangement, at the G20 coordination of exchange rate policies are discussed in an informal way.