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China to offer reassurance to G20 over economic situation

G20 China

Officials in China have moved to reassure finance ministers around the world about the state of the country's slowing economy, amid a G20 meeting in Shanghai.

Chinese finance minister Lou Jiwei insisted the country was committed to tackling the pressures being faced to its economy.

China's economy is currently the second-largest in the world, but is currently going through its slowest rate of growth for 25 years amid attempts to move from being a leading exporter of goods to becoming one led by consumption and services.

The uncertainty of China's economy has been reflected in the markets, with concerns compounded by a sharp fall in commodity prices.

However, China has held firm, insisting that the country's reform direction was clear and unchanged, but admitted the pace of reform would vary.

"China will strike a balance between growth, restructuring and risk management," Mr Zhou said.

"While the reform direction is clear... the pace will vary, but the reform will be set to continue and the direction is not changed."

However, there are still plenty of experts that claim solving China's economic wobbles may not be quite so simple.

A report by Bloomberg suggests the situation has been made more complicated by the fact that GDP growth in the east of the country has far outweighed that in the west, meaning that a uniform approach to reforms may well fall short of addressing what is a highly diverse economy.

That comes alongside the fact that the government has already struggled to bring economic growth up to its own targets, despite carrying a rate that would be impressive by global standards.

There is also a feeling that past economic success has meant that China’s population has got older, leaving some analysts to question whether retirees will spend enough of their savings to help drive consumption and sustain economic rebalancing.

Additionally the years of strong economic growth may have brought about high levels of investment, but the surge in exports has generated substantial surplus.

As a result the country's central bank has essentially started to hoard its own currency, causing it to reach for its wallet in order to steady rates and offset capital outflows.

'Overwhelming' agenda

The view that China is facing something of an uphill task in terms of implementing its reforms is one that is held by a number of analysts, as well as Christine Lagarde, head of the International Monetary Fund (IMF).

Ms Lagarde said China's agenda of structural reforms threatened to be "overwhelming" in its proportions.

Those comments come on the back of concerns from the IMF that the global economy had weakened further amid falling asset prices, leaving it  "highly vulnerable to adverse shocks".

The slowdown of China's economy has been credited as being the main inhibitor to global economic growth.

Bank of England chief Mark Carney echoed that analysis and said the lack of structural reform has affected global growth, with other analysts claiming that Mr Zhou's comments served no other purpose other than to ease global worries over the way Beijing handles its currency.

That comes alongside continued volatility of China's stock market and concerns that the yuan will be allowed to weaken further in order to further boost exports and drive its economy.

However, Mr Zhou remained defiant, adding: "China has always opposed competitive currency devaluations as a way to boost export competitiveness."