China urges US to be open on monetary policy exit
China calls for greater consultation on plans to taper quantitative easing to avoid risks
China has called for greater consultation on the US Federal Reserve's plans to taper quantitative easing to avoid unnecessary risks to the global economy and disruption to currency markets.
Deputy Finance Minister Zhu Guangyao made the remarks at a press briefing in Beijing yesterday ahead of a two-day Group of 20 Summit next week that will be attended by President Xi Jinping.
As the world's main currency issuing country, the United States must consider the spillover impact of its monetary policy, particularly the timing and the rhythm of its exit from the unconventional monetary policy
Zhu added his voice to calls from International Monetary Fund managing director Christine Lagarde, who has cautioned that countries should stay vigilant to risks from plans by developed nations to abandon ultra-loose monetary policy.
As signs of global economic recovery emerge, discussions about the risks and the process of tapering the quantitative easing adopted since the global financial crisis in the US, Europe and Japan are likely to dominate the agenda of the G20 meeting, to be held from September 5 to 6 in St Petersburg, Russia.
"As the world's main currency issuing country, the United States must consider the spillover impact of its monetary policy, particularly the timing and the rhythm of its exit from the unconventional monetary policy," Zhu said. "We hope developed economies could adopt responsible economic policies, whether it's loose monetary policy or an end of it. Even if it's just a plan or a thought, you must have more communication with other member states."
He said the timing and pace of the US withdrawal of its quantitative easing policy would mean "extreme uncertainty" for the Chinese economy. The impact of the tapering plan had already been felt in emerging markets, Zhu said, citing capital outflows and the recent currency depreciation in India and Indonesia.