This month's featured article
China Should Implement Capital Controls to Stem Capital Outflows
ITO HiroyukiVisiting Fellow, RIETI
Finance ministers and central bank governors from the G20 major economies met in Shanghai on February 26-27, 2016. The discussion at the meeting centered on the growing uncertainty of global financial markets, that was triggered by plunges in stock prices on the Shanghai Stock Exchange (SSE) since the beginning of this year. Addressing the downside risk to the global economy, the ministers and governors pledged to "use all policy tools—monetary, fiscally, and structurally—individually and collectively" to support growth, while reaffirming that countries should "refrain from competitive devaluations."
By the end of February 2016, the SSE Composite Index fell by nearly 50% from its peak recorded in June 2015. Japan's Nikkei 225 stock index dropped by more than 15% during the first two months of 2016, and European and New York markets have since been experiencing bear markets. The China-triggered financial turbulence is casting a shadow over the future course of the world economy.
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