U.S. Treasury Secretary Jacob Lew said risks including volatility in emerging markets and China’s economic agenda are clouding the global outlook, requiring nations to focus on boosting growth and job creation.

“There has been considerable volatility in global markets, especially in several emerging markets,” Lew said in a letter Tuesday to his Group of 20 colleagues. “We are monitoring these developments closely.”

Lew, who will join the Feb. 22-23 meeting in Sydney of G20 finance ministers and central bankers, urged China to move toward a stable economy that “delivers higher living standards to its population.” The euro area, which is “vulnerable to the persistence of very low inflation,” needs to boost domestic demand and strengthen its banking system, he said. 

Japan needs to stay committed to the implementation of structural changes that would help bolster the domestic market and stimulus measures to cushion the impact of the increased consumption tax, he said in the letter.

“While we are experiencing a global economic recovery, activity remains weak and global demand is deficient,” Lew wrote. “Actions to support near-term recovery in demand and global rebalancing are critical for the health of our economies.”

He called for a “durable rebalancing of global demand” and urged countries with current-account surpluses to boost domestic demand growth and adhere to market-based exchange rates that “facilitate, rather than frustrate, the international adjustment process.” (Bloomberg)