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G-20 trade ministers see global investment falling up to 15%

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The G-20 representatives pledged to increase their efforts to facilitate trade and urged other World Trade Organization member nations to do likewise to enable global commerce. PHOTO: REUTERS

[SHANGHAI] Global cross-border investment will probably decline by as much as 15 per cent this year as trade remains sluggish, China's commerce minister said after a Group of 20 trade ministers meeting on Sunday.

The G-20 representatives pledged to increase their efforts to facilitate trade and urged other World Trade Organization member nations to do likewise to enable global commerce, Gao Hucheng said at Sunday's briefing. The ministers had met in China's financial capital for two days of talks on how to boost investment cooperation before heads of state convene for a Sept 4-5 leaders summit in the eastern city of Hangzhou.

The ministers projected a 10 per cent to 15 per cent drop in cross-border investment this year, Mr Gao said. Britain's referendum in favor of leaving the European Union will crimp global trade in the short term, and a G-20 workshop will study the potential impact, China's Vice Commerce Minister Wang Shouwen said at the briefing.

In February, finance chiefs and central bankers from the group agreed to consult closely on foreign-exchange markets and reiterated pledges to refrain from competitive devaluations. Since then, currency markets have been roiled by Brexit, which caused the pound to plunge and helped drag down China's yuan.

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The G-20 opposes protectionism and supports establishing new investment principles that are open, non-discriminatory, transparent and predictable, the group said in a statement.

The World Bank early last month cut its outlook for world gross domestic product this year to 2.4 per cent, a pace unchanged from 2015 and down from the 2.9 per cent estimated in January, as business spending sags in advanced economies including the US and commodity exporters in emerging markets struggle.

The WTO released a world trade indicator on Friday, projecting sluggish trade in July and August.BLOOMBERG

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