In a wide-ranging interview with Xinhua, the Chinese finance minister Lou Jiwei started from the normal fantasy-land of central-planners by noting that the topic of a Chinese hard-landing "was not discussed at the G-20," because "no participant believes in the existence of that risk." Commenting on calls for the Chinese to launch new stimulus (to save the world's economy), Lou admonished the other nations, adding "I suggest they fulfill their own due work rather than counting mainly on others." He remained adamant that China is still growing and creating jobs but fears what everyone else fears: "The global market will sustain negative impact should the Fed fail to interact properly with other components of the market." In other words, "get to work, Mr. Bernanke, and don't remove the punchbowl," because as Lou notes, "some countries are overly optimistic on their outlooks."
Via Xinhua,
China Finance Minister Lou Jiwei as saying at G-20 meeting in Moscow:
- Some developed countries appear to be overly optimistic about the economic outlook and
- The U.S. is actually planning to exit its quantitative easing.
- Private consumption in U.S. may weaken if U.S. rolls back QE
- U.S. economic growth may slow again and
- U.S. may be forced to roll out a new round of QE which may jolt global financial markets, affecting not only emerging markets but also peripheral countries in Europe
- U.S. must implement stable strategy to exit QE to avoid the situation that it may have to restart easing after a withdrawal