S. Korea's finance minister voices concern over negative effect from stimulus exit

MOSCOW, July 20 (Yonhap) -- South Korea's finance minister expressed concern that the rollback of stimulus measures by advanced countries could have a negative ripple effect on the global economy, his office said Saturday.

The concerns were raised by Finance Minister Hyun Oh-seok during talks with his Chinese counterpart Lou Jiwei that were held before the start of the Group of 20 meeting here in Moscow, Russia.

Hyun emphasized the need for global cooperation to effectively cope with the negative ripple effect and Lou shared this view during their meeting, according to the finance ministry.

Both finance ministers also agreed to cooperate in minimizing the negative effect within the frame of the G20 meeting and other international gatherings.

As for quantitative easing being pushed by Japan, they shared the view that it should not be used to drive down the yen's value for the sake of gaining a competitive edge but to stimulate its domestic demand as it was initially intended, the ministry said.

Meanwhile, Lou mentioned that China's expansionary macroeconomic policy adopted in the wake of the financial crisis in 2008 contributed to the fast recovery of its economy but admitted that the policy has also created some side effects such as excessive investment.

He noted that the new Chinese government will refrain from such drastic economic stimulus measures, the ministry said.

Meanwhile, Hyun said that the G20 meeting will continue to serve as a "premium forum" where its member countries discuss global economic issues to map out their coordinated policy directions.

He made the remarks after attending the G20 meeting that ended with a communique in which each country agreed to boost job creation and economic growth as their top priorities, among other things.

Hyun told reporters that the growing concern about the negative impact from the rollback of quantitative easing being pushed by advanced countries helped revive a sense of urgency among member nations that they need a global coordination on many issues, which can be achieved through the G20.

"The G20 has its own significance just as a channel for communication and information-sharing among its member countries," Hyun said.