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‘China alone cannot save world from Brexit downturn’

CHENGDU: The world cannot depend on China alone to save it from a Brexit-induced downturn, the country’s premier said Friday, ahead of hosting a meeting of G20 finance ministers.

Government representatives and central bank chiefs from the world’s top 20 economies gather in the southwestern Chinese city of Chengdu this weekend with the impact of Britain’s vote to leave the European Union (EU) high on the agenda.

China’s economic boom of recent decades has seen it become the world’s second-largest economy and a key driver of global growth, with a massive stimulus package Beijing launched in 2008 credited with helping ease the pain of the global financial crisis.

But investors worldwide have worried over its slowing expansion, while Britain’s referendum last month has heightened risks and instability.

“It is impossible to carry all of the burden of the whole world on our shoulders,” said Premier Li Keqiang, after meeting the heads of six global economic organisations, including the World Bank and International Monetary Fund (IMF) in Beijing.

The IMF just days ago predicted that uncertainty created by Britain’s vote to leave the EU, commonly referred to as Brexit, would slow the world economy into next year.

In an update to its April forecast, the IMF lowered its forecasts for global growth this year and next by 0.1 percent, to 3.1 percent and 3.5 percent respectively.

“Failure to achieve clarity about the future relationship between the UK (United Kingdom) and the European Union would add to uncertainty and weigh on confidence,” IMF staff warned in a report for the G20 finance ministers’ meeting issued on Thursday.

“And, if not managed well, China’s transition could further raise volatility around the baseline path of the global economy,” it said. -AFP