International
China to attend meeting of G8 Finance Ministers in London
By Finfacts Team
Jun 8, 2005, 22:11

China's State news agency Xinhua, reports that Chinese Finance Minister Jin Renqing will fly to London for a meeting between finance ministers of the Group of Eight industrialized nations and of China, India, Brazil and South Africa, scheduled for next week-end.

Britain's Chancellor of the Exchequer Gordon Brown (r) meets Chinese Finance Minister Jin Renqing during his visit to China's capital Beijing February 21, 2005. Brown said that orderly capital account liberalisation was the way forward for modern economies, including China. (Photo: China Daily)

According to a one-sentence statement released by the Ministry of Finance on Wednesday, Jin will attend the meeting at the invitation of his British counterpart Gordon Brown.

The ministers are reportedly scheduled to discuss global economic and development issues.

Britain is currently holding the rotating presidency of G8 and will play host to a summit of the G8 in Scotland next month.

China is serving as the president of both the meeting Group 20 finance ministers and central bank governors, and the meeting of Asia and Europe finance ministers.

The Chinese and British finance ministers have promised to coordinate their efforts on matters concerning international development and global poverty reduction.

According to Xinhua, during Brown's visit to China in February this year, the two ministers said the two countries should strive to realize the United Nations Millennium Development Goals.

Brown set out a list of proposals to meet the Millennium Development Goals, which were agreed at United Nations level in 2000 and include halving global poverty and disease by 2015.

US Treasury Secretary John Snow, will inevitably bring up the issue of the revaluation of the renminbi to pacify protectionists in the US Congress, who are threatening to impose sanctions on China.

Acting US Under Secretary for International Affairs Randal K. Quarles said the following on the G8 meeting of Finance Ministers:

Our primary focus in these discussions remains growth. The global expansion remains robust, yet there are challenges to be faced to sustain strong growth going forward.

The U.S. economy is on sound footing, and growth is strong. First quarter performance was robust at 3.5 percent. Solid gains in consumer expenditures, prompted by increased hiring and strong household net worth, have supported GDP growth. The labor market has improved substantially, with payroll jobs up 3.5 million in the last two years and the unemployment rate at its lowest level since September 2001. In sum, growth is well balanced, with expanding business and residential investment, and strong household demand each contributing.

America's economy is moving in the right direction. President Bush is committed to keeping the economy on the path of healthy growth. Fiscal consolidation is a top priority. Already, we are seeing progress. Increased hiring, growth in demand, and expanding profits have led to a sizable increase in tax revenue so far this fiscal year. As a result, the Federal budget balance is likely to come in well below the $427 billion that had been projected for fiscal year 2005. The Administration remains steadfast in its effort to create the conditions for strong growth well into the future by making the tax cuts permanent, reducing the burden of frivolous lawsuits, passing a national energy policy, and strengthening social security.

US Treasury Secretary John Snow

Japan's economy had a welcome rebound in the first quarter, although growth forecasts remain modest and deflation persists. Growth in Europe has been generally disappointing, and the outlook for domestic demand is weak.

As the Secretary has emphasized, global adjustment is a shared responsibility. The United States is doing its part by addressing the fiscal deficit. But our actions alone will not be sufficient to unwind global imbalances. Europe and Japan must continue to adopt and implement vigorous and necessary structural reforms to lay the foundation for vibrant growth.

During the course of the weekend, Secretary Snow and his colleagues will meet with Finance Ministers from key emerging market countries – India, Brazil, South Africa, and China. These countries represent an increasing share of the global economy and will play an ever larger role over time. They will bring important experience and perspectives to the discussion. The Secretary also looks forward to meeting bilaterally with a number of these Ministers.

I expect that development will be a key focus of discussions this weekend. The plight of the poorest countries is a high priority for all of us. The United States is keenly aware of the challenges faced by these countries, and we are actively engaged in supporting economic reform and promoting long-term growth in Africa and beyond. Through our Millennium Challenge Corporation, we have taken the lead in identifying and implementing more effective ways to provide development assistance. The MCC aims to assist countries that govern justly, invest in people, and encourage economic freedom – policies that are fundamental to achieving growth, catalyzing investment, and ensuring that foreign assistance has a real effect. Furthermore, through the President's Emergency Plan for AIDS Relief (PEPFAR), the United States is leading the international fight against the debilitating HIV/AIDS epidemic.

Helping low-income countries depends on ending the lend-and-forgive cycle, so that they can move into an era of sustainable debt. The Bush Administration has put forward a bold proposal to provide up to 100 percent relief on IDA, African Development Fund and IMF loans to the Heavily Indebted Poor countries. This plan also would include additional resources for low-income countries, which will both finance important new development projects and preserve the long-term financial strength of these international financial institutions. The removal of unsustainable external debt and the delivery of additional development resources will provide significant support for countries' efforts to reach the development goals of the Millennium Declaration.

Free trade is also fundamental to a vibrant world economy. Fully open financial services sectors can make important contributions for growth. I expect this is an issue that Secretary Snow will raise with other Ministers, with the goal of working together for an ambitious result at the Hong Kong WTO Ministerial. Similarly, the Secretary will likely also take notice of the role free trade can play in solidifying the gains in democracy, such as in the Administration's Middle East free trade agreements (e.g., Morocco, Bahrain) and DR-CAFTA, which is currently being considered by Congress. We will also address the importance of the financial services agenda with European finance ministries and key EU regulators in a trip to The Netherlands, Belgium, France and Germany immediately following our Ministers' meeting in London.

Let me close by drawing to your attention our ongoing work to combat terrorist financing. This will be another key item on the Ministers' agenda. I expect Ministers will review the progress made by Financial Experts to implement their Action Plan to strengthen the process of multilateral asset freezing, improve information sharing, and explore the possibility of broadening the application of new financial tools to disrupt serious crime. In regard to the latter, Secretary Snow will share with his colleagues the tools that we, in the United States, have available via Section 311 of the U.S. Patriot Act. These tools enable us to adopt a graduated approach, ranging from enhanced due diligence to the closure of correspondence accounts.