WASHINGTON — Finance ministers and central bankers are gathering in Shanghai on Friday and Saturday for the G-20 summit against the backdrop of a global economic slowdown, falling commodity prices and financial market turmoil, which are sure to be key issues raised during the two-day meeting.

This story first appeared in the February 26, 2016 issue of WWD. Subscribe Today.

China’s management of its currency and markets, which has been widely criticized, will also likely factor into the discussions.

Financial markets in the U.S. and around the world suffered a major shock in August when China unexpectedly devalued the yuan, shaking international stock markets, and again in early January when China’s stock market tumbled. China has moved in the past week to stabilize the yuan and its central bank said it planned to keep the yuan stable against a basket of currencies, rather than devalue it to boost exports.

But the nation’s currency situation has spurred policymakers to keep a watch on any move by Beijing to weaken the yuan. There is widely shared concern that a dramatic devaluation could spark a currency war in Asia.

U.S. Treasury secretary Jacob Lew, who will be in Shanghai for the summit, is under pressure from U.S. lawmakers to press China to stop devaluing its currency as it tries to manage the domestic markets through the slowdown. Lew will arrive in Shanghai with the backing of a newly signed U.S. bill designed to strengthen protections against currency devaluations.

Lew said the trade bill, signed by President Obama on Wednesday, “marks a major step in this administration’s goal of moving countries toward more market-determined exchange rates and preventing currency devaluation to gain a competitive advantage.”

He noted the legislation gives the U.S. the “authority to take additional action against unfair currency practices including important new reporting, monitoring and engagement tools, as well as the ability to levy meaningful penalties to hold countries accountable.”

“As we head to the G-20 meetings this week, this provides yet another tool for our economic toolkit as we look to ensure a level international playing field,” Lew said.

The International Monetary Fund said in a staff report released this week that the global recovery has “weakened further amid increasing financial turbulence and falling asset prices.” Activity “softened” at the end of last year, particularly in advanced economies, as low demand in some countries and a broad-based weakening of potential growth held back the recovery, the IMF said.

“Adding to these headwinds are concerns about the global impact of China’s transition to more balanced growth, along with signs of distress in other large emerging markets, including from falling commodity prices,” the report said.

In its January “World Economic Outlook,” the IMF downgraded its global economic and trade forecast for 2016 and 2017. The forecast for global economic growth was cut 0.2 percent from its previous outlook in October for this year and 2017. Global economic growth, currently estimated at 3.1 percent in 2015, is projected at 3.4 percent in 2016 compared with a year earlier, and 3.6 percent in 2017, the IMF said.

“To support global activity and contain risks, the G-20 must act now to implement forcefully the existing G-20 growth strategies and plan for coordinated demand support using available fiscal space to boost public investment and complement structural reforms,” the IMF concluded this week. “To address the potentially protracted risks faced by commodity exporters and emerging markets with strong fundamentals but high vulnerability, there may be a need to consider reforms to the global financial safety net, including new financing mechanisms.”

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