China vows to use taxation to encourage renewable energy and reduce demand China pledged yesterday to use financial and taxation measures to reduce its demand for oil, as the annual Group of 20 nations meeting closed with a warning on oil prices. In a communique issued at the close of the two-day summit, the group of key industrialised and developing nations voiced concern that 'long-lasting high and volatile oil prices could increase inflationary pressures, slow growth, and cause instability in the global economy'. The G20 also named widening global imbalances and rising protectionism as risks that 'could exacerbate uncertainties and aggravate global economic and financial vulnerabilities'. 'Bearing in mind our shared responsibilities, we are determined to implement the necessary fiscal, monetary and exchange rate policies, and accelerate structural adjustments to resolve these imbalances and overcome these risks,' the communique said. The message was seen as a call on China to loosen its grip on the yuan, as requested by the United States and other Group of Seven industrialised nations. Finance Minister Jin Renqing told a briefing at the end of the meeting that China aimed to become a country that was 'mainly reliant' on its own resources. 'We will take measures - using fiscal and taxation leverage - to encourage the use of renewable energy, develop new energies and oil substitutes,' he said. China will also adopt other measures to reduce the use of oil, such as policies to encourage the production of energy-efficient and low-emission vehicles and boost the development of public transport, Mr Jin said. Mr Jin was chairman of the meeting, the seventh since the G20 was set up, which was held in Xianghe , Hebei province , near Beijing. He played down the impact of oil price rises on the mainland economy, saying the country might 'only spend an additional US$10-20 billion' for imports of crude oil and petroleum products. 'A demanding task we are now facing is to gradually rationalise oil prices in the market,' he added. Oil prices have shown no sign of easing from near record-high levels above US$60 a barrel. The G20 communique also indicated a bigger role for China in the World Bank and International Monetary Fund, saying that 'the evolution of the international economy and global financial markets requires a continuing review of the representation, operations and strategies' of the international agencies. The G20 members have already issued a joint statement on reforming the agencies, reaffirming 'the principle that the governance structure - both quotas and representation - should reflect such changes in economic weight'. The statement underscored the importance of achieving progress on quota reform by the next IMF and World Bank annual meetings in Singapore in September 2006.