China’s transition to slower but more sustainable growth was recognized by G20 finance ministers and central bank governors over the weekend, when they pledged to take decisive action to keep economic recovery on track.

China’s economic situation is still within expectations, and GDP growth is predicted to remain at about 7 percent in the next four to five years, Finance Minister Lou Jiwei said on Sept 5.

Lou was speaking after the two-day G20 Finance Ministers and Central Bank Governors Meeting in Ankara, the Turkish capital.

Lou identified the slower growth status as the “new normal”, which will be a “painful” period for the country as it shifts to a consumption-driven growth pattern from one driven by investment and exports. The restructuring reforms are planned to be completed by 2020.

“But China’s growth still contributed 30 percent to global growth, even as it slowed to 7 percent amid the deleveraging process,” he said.

Most policymakers at the meeting welcomed China’s explanation of how it plans to minimize the disruption from its economic transition.

Turkish Deputy Prime Minister Cevdet Yilmaz said on Sept 5 at a news conference in Ankara, “G20 finance ministers and central bank governors have talked about the economic problems in China, and we are not pessimistic about China keeping to 7 percent growth in the future.”

Saudi Arabia’s central bank Governor Fahad al-Mubarak said in an interview with Bloomberg Television in Ankara: “The issue with China is overblown. We’re confident that China is on the path of reform.”

The G20 meeting took place amid unexpected volatility in financial markets, with commodity prices dropping and some currencies depreciating.

Zhou Xiaochuan, governor of the People’s Bank of China, the country’s central bank, stressed that the recent market volatility will not stop reforms.

“The yuan’s exchange rate against the US dollar is becoming stable, the stock market correction is almost in place and the financial market is expected to be more stable,” he said.

The yuan was adjusted against the US dollar by about 3 percent on Aug 11 when the People’s Bank of China reformed the daily reference rate.

The G20 finance ministers and central bank governors released a statement after the meeting, vowing to take measures to boost economic recovery and avoid persistent exchange rate misalignments.

Market correction ‘almost complete’

China’s stock market correction is almost complete, central bank Governor Zhou Xiaochuan said in Ankara, Turkey, at the G20 meeting.

The government’s rescue measures, including a liquidity injection, have curbed plummeting prices and prevented risks, he said.

Three rounds of stock price adjustments started in June after the benchmark index surged by 70 percent in four months, forming market bubbles.

“After the adjustment, investment with borrowed money has been reduced, and it has not had any notable impact on the real economy,” Zhou said.

By the end of last week, China’s stock prices had fallen by nearly 40 percent from the June peak, wiping out most of this year’s gains.