China will still be leading actor in global economy: economist
Ministers and central bank chiefs from the world's top 20 economies sought on Saturday to bolster market confidence in the global economy and calm mounting jitters over the fallout from China's slowdown.
"Global growth falls short of our expectations. We have pledged to take decisive action to keep the economic recovery on track and we are confident the global economic recovery will gain speed," finance ministers and central bank chiefs said in a communique after their two-day meeting in Ankara.
The group vowed to "carefully calibrate and clearly communicate our actions ... to minimize negative spillovers, mitigate uncertainty and promote transparency" as key global economies search for robust growth.
The economic supremos also vowed to "refrain from competitive devaluations and resist all forms of protectionism," following China's devaluation of the yuan last month.
The Chinese central bank on August 11 devalued the yuan by nearly 2 percent, surprising markets and raising concerns about the effects of China's economic slowdown.
But economists are optimistic about China's economy, which achieved great growth in the past 30 years. "Chinese people have a strong national consciousness and they work very hard. So I am pretty sure China will still be the leading actor in the global economy," Turkish economist Ufuk Sanli said.
"China is the growth engine. It is the leading force of the global economy. What will be important from now on is how China keeps this growth speed," the economist said while commenting on the G20 meeting.
Talking about China's move in devaluating the yuan, Ufuk said that the developed countries like EU won't be much affected by the move.
On the contrary, the devaluation is a good news for them as the costs will be reduced and China's trade will increase.
Economist Umit Akcay said the slowdown in China's economy is not only China's own problem. Currently, the main problem in the global economy now is how firms' profitability can be revitalized.
Cagdas Sirin, an economist from Bahcesehir University, said China is the world leader in exports. Consequently, it is natural that developments in the Chinese economy affect the whole world.
Sirin said China could not continue with its export-oriented economic growth model and China should take steps to revive its domestic demand.
"If China can change its growth model successfully, China will also be a huge consumption economy. This will be great opportunity for developing countries," he added.
The communique called on governments and central banks not to over use interest rates as a tool for boosting economic activity and instead implement fiscal policies to support growth and job creation.
