The global economy is being threatened by rising protectionism and risks from highly leveraged financial markets, Chinese President Xi Jinping said at the opening of a two-day summit of leaders from G20 nations.
His warning on Sunday followed bilateral talks with Barack Obama that the U.S. President described as “extremely productive”, but which failed to bring both sides closer on thornier topics such as tensions in the South China Sea.
With the summit taking place after Britain’s vote in June to exit the European Union and before the U.S. presidential election in November, observers expect G20 leaders to mount a defence of free trade and globalisation and warn against isolationism.
The global economy has arrived “at a crucial juncture”, Xi said, in the face of sluggish demand, volatile financial markets and feeble trade and investment.
“Growth drivers from the previous round of technological progress are gradually fading, while a new round of technological and industrial revolution has yet to gain momentum,” he said.
G20 countries are set to agree in a communiqué at the end of the summit that all policy measures — including monetary, fiscal and structural reforms — should be used to achieve solid and sustainable economic growth, Japanese Deputy Chief Cabinet Secretary Koichi Hagiuda said.
Mr. Xi also called on G20 countries to match their words with actions.
“We should turn the G20 group into an action team, instead of a talk shop,” he said.
But some of the G20 leaders have begun drawing battle lines in disputes over issues ranging from trade and investment to tax policy and industrial overcapacity.
On Sunday, Mr. Xi held talks with Australian Prime Minister Malcolm Turnbull and told him he hoped Australia would continue to provide a fair, transparent and predictable policy environment for foreign investors.
Meanwhile, European Commission President Jean-Claude Juncker said China must set up a mechanism to address its problem of industrial overcapacity, saying it was “unacceptable” the European steel industry had lost so many jobs in recent years.
Mr. Obama held talks with Mr. Xi on Saturday that ran late into the night.
He urged Beijing to uphold its legal obligations in the disputed waters of the South China Sea, and stressed U.S. commitments to its regional allies.
Mr. Xi said China would continue to safeguard its sovereignty and maritime rights in the South China Sea.
But China is keen to keep the summit focused on economic issues and to prevent other disputes from overshadowing it.
