The eleventh meeting of the Group of 20 strongest economies (G20) started today in Hangzhou (China). It is the first time a G20 summit is hosted by the world's second-largest economy, a market that has been plagued by an economic slowdown over the past six years. The summit was opened by China's President Xi Jinping who urged leaders to avoid "empty talks" and instead to focus on boosting trade and the world economy which is currently at a critical juncture reflected by high market volatility. Critics, however, point out that China is known for implementing trade barriers.
Meanwhile, prior to the Summit in China, the International Monetary Fund (IMF) announced it is likely to cut its forecast for global economic growth again before the year-end. According to the latest revision, which was published just after the Brexit decision, the IMF sees the global economy growing at 3.1 percent (y/y) in 2016, followed by 3.4 percent (y/y) in 2017.
At the summit US President Barack Obama informed that the USA will prioritize trade talks with the European Union (EU) before talking in depth with the UK. However, Obama said Britain will need to explain what the Brexit decision may in fact entail, both for the UK and Europe.
Another topic on the agenda of the summit's first day was the steel industry. China, the world's top steel producer, has caused a huge oversupply on the world market (and thus this has resulted in falling steel prices). European Commission President Jean-Claude Juncker stated that China needs to address this issue as it has led to the loss of many jobs in the European steel industry in recent years.
Other topics that will be discussed during the two-day G20 summit are related to the three main pillars of cooperation: innovation, a new industry revolution, and the digital economy.
The G20's first meeting was organized in 1999. the G20 involves 19 countries and the European Union. The countries are: Argentina, Australia, Brazil, Canada, China, Germany, France, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, Turkey, the United Kingdom, the United States, South Africa, and South Korea.
Prior to the G20 summit, Indonesian President Joko Widodo met Chinese President Xi Jinping on Friday (02/09) in Hangzhou. During this meeting both sides vowed to raise cooperation in trade, finance, infrastructure and other fields. One of the projects that was discussed was Indonesia's first high-speed train (between Jakarta and Bandung) that will be mainly developed and financed by Chinese companies.
Ahead of the G20 summit, on Saturday (03/09), China and the United States (the world's leading emitters of greenhouse gasses) also ratified the Paris deal to combat climate-warming emissions. This marks a major step toward the enactment of the pact, perhaps later this year and setting an example for other countries to follow.