OREANDA-NEWS. March 11, 2013. Finance Ministers and Central Bank Governors’ Meeting was held in Moscow. This was the first Finance Ministers and Central Bank Governors’ meeting since Russia took over the G20 presidency. The following issues were discussed in the meeting, i.e. global economic conditions, G20 Framework for strong, sustainable and balanced growth, long-term financing for investment, reform of the international financial architecture and financial regulation. A communique was released after the meeting. The Chinese delegation, led by Governor Zhou Xiaochuan, and Finance Minister Xie Xuren, attended the meeting.

Participants judged that the tail risks of the global economy had receded and financial market situations had improved, but global economic growth was still weak and faced many challenges and risks, including the uncertainty of macro-economic policies in developed nations, private sector deleveraging, impaired credit intermediation and incomplete rebalancing of global demand, and etc. To cope with the current challenges, developed nations should first formulate credible medium-term fiscal consolidation strategies, take domestic price stability and economic recovery as the objective of their monetary policies, and minimize the negative spillovers. All countries should continue to honor their commitments on the financial sector reform and structural reform, promote demand rebalancing and early recovery of global economy, continue to promote market-based exchange rate systems, refrain from competitive devaluation and resist all forms of protectionism.

Recognizing the importance of long-term investment financing to economic growth and employment, the finance ministers and central bank governors decided at the meeting that it was necessary to study how to stimulate long-term financing for investment. The governors and finance ministers reaffirmed the urgent need to ratify 2010 IMF quota and governance reform, expressed their commitment to achieve an agreement on a new quota formula and to complete the General Quota Review by January 2014. They also reiterated their commitments to the full, timely implementaton of financial sector reforms, and urged all jurisdictions to adopt the Basel ? reforms as expetitiously as possible. It was also decided at the meeting to formulate measures to prevent tax base erosion and profit shifting, strengthen tax transparency and information exchange continuously, continue to exchange experience and deepen cooperation on climate finance based on the objectives, principles and provisions of UNFCCC.

In the meeting, Governor Zhou Xiaochuan stressed that Chinese government focused on structural adjustment and domestic demand expansion, and the remarkable effects of policy measures contributed to global rebalancing. According to Governor Zhou, the rebalancing of global demand in the future will depend on structural reform in some countries to enhance competitiveness, especially the reform of labor market. In the meantime, it was necessary to release medium-term fiscal strategies to reduce policy uncertainty, and to stimulate private demand for economic growth. Governor Zhou called upon G20 countries to analyse the deep-rooted reasons of saving disparity across economies and explore effective ways to turn saving into long-term investment. Besides, he called upon countries to ratify and implement the IMF quota and governance reform, and make sure that the 15th general quota review will be completed on time. He hoped that the IMF could implement new surveillance decisions effectively to enhance surveillance on fiscal and monetary policies of certain countries and their spillovers.

Minister Xie Xuren provided an update of the current economic situations and policy stance in China. Mr Xie said that in 2013 China would continue to implement a proactive fiscal policy and a sound monetary policy, focus on improving the quality and efficiency of economic growth, actively expand domestic demand, reinforce structural adjustment, improve people’s livelihood, enhance the endogenous drivers of economic growth for sustainable and healthy development of the economy. With regard to the current international economic situations, he pointed out that member states of G20 should continue to take economic recovery, growth and job creation as their top priorities, adopt feasible macroeconomic policies, accelerate structural reform, cultivate new sources of economic growth, oppose all forms of trade protectionism, and provide a free and open environment for trade and investment to promote global economic recovery and growth. Developed countries should appropriately handle the relation between fiscal strategies and economic recovery, achieve medium-term fiscal sustainability while promoting near-term economic growth, and minimize the negative spillovers of quantitative easing monetary policy.
On the margins of the Finance Ministers and Central Bank Governors’ Meeting, deputy finance ministers and deputy central bank governors of the BRICS countries met to discuss fiscal and financial cooperation issues, in particular, the feasibility of creating a BRICS Development Bank and a BRICS reserve pool.