Cooperation for Brexit Shock

The Group of 20 reconfirmed their determination to overcome great and immediate impact of Britain’s exit from European Union in its meeting of finance ministers and governors of central bank held in Chengdu, China on Sunday. The host nation successfully avoided being the target of the Western nations on its unilateral domination in South China Sea. One thing clear, however, is that this framework of world biggest economies no longer a viable organization to remove crucially negative elements of world economy.

Japanese newspapers reported that G20 delivered a joint statement which indicated growing uncertainty brought by United Kingdom’s decision of leaving European Union in June. International monetary market showed vulnerability with Brexit soon after the referendum was concluded. Uneasiness on decline of international trade or investment covers world economy.

G20 required U.K. maintaining moderate relationship with European community, expecting “appearance to be a close partner of European Union in the future,” as interpreted by Japanese media. The communiqué realized that the world economy is actively preparing for dealing with potential impacts, stemming from British referendum, on economy or monetary system.

On situation of the world economy, G20 financial ministers and central bankers shared less positive recognition than in previous meeting in April, telling “recovery continuing is still lower than preferable level and downward risk is remaining.” They reconfirmed their determination to mobilize all policy tools for monetary reform, fiscal policy or structural reform.

Host nation, China, has been afraid of being accused its unilateral advance in South China Sea after Hague Court of Arbitration found it baseless. There is no news of China being grilled on the issue so far. Newspapers rather reported sharp rift in Association of Southeast Asian Nations shown in its foreign ministers meeting held in Vientiane, Laos, started on Sunday.

Instead, G20 indicated China as causing distortion in international market with excessively low price of steel. It is broadly recognized that excessive production of steel in China has been supported by governmental subsidy. G20 confirmed that issue to be settled as international problem. The ministers and bankers required China to participate in related meeting of Organization of Economic Cooperation and Development in September.

The group also demanded avoiding competition for currency evaluation. Japan is categorized in the players of it. Japanese Financial Minister, Taro Aso, told reporters that a weaker Chinese yuan was not good for Chinese economy, pretending Japan to be out of focus.