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    China Joins Europe in Syria Economic Risk Warning at G-20 Summit | Shelfari

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    the koyal group economy reviews, China Joins Europe in Syria Economic Risk Warning at G-20 Summit

    China and Europe at a Group of 20 summit hosted by Russia warned that U.S.-led strikes on Syria would risk harming the global economy, bolstering efforts to rally opposition to the proposed attack.

    “Such a military action will definitely have a negative impact on the world economy, especially on the oil price,” Chinese Vice Finance Minister Zhu Guangyao told reporters in St. Petersburg today. “We hope that this issue could be solved at the United Nations and through diplomatic channels.”

    U.S. President Barack Obama, who has asked Congress to endorse a punitive strike on Syrian President Bashar al-Assad’s forces after an alleged chemical attack on civilians, is trying to enlist international support at the G-20 meeting. Italy and Germany have joined Russia and China in insisting they won’t support military intervention in Syria without approval from the United Nations Security Council.

    Italian Prime Minister Enrico Letta said any such operation would cause volatility on financial markets. “We don’t need volatility, we need stability,” he said. “We are concerned about it.”

    Russia, a Soviet-era ally of Syria, and China, both veto-wielding members of the Security Council, have repeatedly blocked any action against Assad over a 2 1/2-year civil war that has killed more than 100,000 people.

    Oil Effect

    The possibility of renewed conflict in the Middle East comes as the expected tapering of U.S. stimulus measures is causing concern of spillover effects in emerging markets. Brent may rise to $120-$125 a barrel if the U.S. and allies begin military action in Syria and may “spike briefly” to $150 if a U.S.-led attack on Syria sparks further conflict in the Middle East and supply disruptions, Michael Wittner, Societe Generale SA (GLE)’s New York-based head of oil market research, said in a report on Aug. 30.

    “The concern for everyone is that a rise in oil prices would pose a risk to economic recovery,” Capital Economics Ltd. economist Julian Jessop, said by phone from London today. “It remains to be seen if the current rate of growth will continue if oil prices stay at today’s levels or even rise.”

    The 17-nation euro area returned to growth in the second quarter after 18 months of recession.

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