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New energy for world economy

Reporter: Liling Tan 丨 CCTV.com

08-29-2016 14:52 BJT

Full coverage: G20 Hangzhou Summit

How can the world’s strongest economies better collaborate to increase growth and address some of today’s mounting challenges?

At the G20 summit in Hangzhou next month, hosted by Chinese President Xi Jinping, world leaders will discuss new partnerships and propose solutions to some of the most pressing economic issues.

The key issue expected to dominate September’s G20 Summit in Hangzhou, China will be global growth… more specifically, the SLOWDOWN in global growth.

Stephen Leeb, Research Chairman, Leeb Group, said: "Clearly it’s slow growth. I mean, in a word. Basically, what can harm the world much quicker than anything else is very slow growth and unequal growth, and right now we are subject to both… both international unequal growth in the sense that you have widening inequalities and externally where you have countries that are doing very well or pretty well and some countries that are almost flatlining.”

"There’s no way to, in effect, get global growth, get domestic growth — whether you’re talking about China, the U.S., Canada, Japan, Germany, France, Britain — you can’t really get that expansion of real GDP going unless you have a sense of coordinated policy," said Steve Blitz, Chief Economist, M Science.

And that’s where the G20 comes in. Comprised of the strongest global economies, the group accounts for about 85 percent of the world’s economy, and 80 percent of the trade. It meets every year to discuss and promote global financial stability.

This year, economists like Steve Blitz and Stephen Leeb hope the summit can fix key economic issues, especially in this time of uncertainty stemming from China’s slow-down to Britain’s exit from the European Union, from a likely U.S. interest rate hike to fears of a currency war.

Their wishlist for the G20 summit includes coordinated policies to address issues like trade surpluses and trade protectionism, plans to increase fiscal spending and ways to deal with currency manipulation.

"As an investor, there is no doubt. I want to see a commitment to infrastructure, a commitment to fiscal spending, and when it comes to Europe, a willingness to drop this extreme austerity, which is getting us nowhere, it’s exacerbating inequalities, and I think it’s going to basically lead to a very difficult world situation,” Stephen Leeb said.

"In the end, two things really need to happen… the first is coordinated fiscal policy to increase demand in various countries.

"The second part which I think is somewhat more doable, but it’s doable over years, not one G20 meeting, is to address currency.

"You have to make globalization work. You need currencies… either you gonna have to fix them at some level and keep them fixed, or you’re gonna have to really police and makes sure everybody has floating exchange rates,” Steve Blitz said.

And both say when the 20 economic powerhouses meet on September 4th and 5th, it needs to be more than lip service. Leaders need to find solutions, agree on them, and then follow through.

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