World leaders need to push back against a tide of "rampant" protectionism and nationalism, Canadian premier Justin Trudeau said Saturday, warning that "building walls" was not the solution.

The global economy is not working for too many people, Trudeau said, fuelling anger among voters left behind by decades of unequal growth and "taking us in the wrong direction in many places in the world".

"There's a sense the forward march of progress has stalled," he told a business forum in the Chinese city of Hangzhou which is hosting the G20 summit.

"That anxiety is exactly what is leading to the kind of anti-trade, anti-globalisation protectionism that is running rampant, whether in Brexit, or in protectionist rhetoric in election campaigns," he said.

"We have to push back against that," he said. "It's very tempting to fall into divisive, fearful rhetoric. That's one of the things we have to be strongly compelling in standing against."

Trudeau did not explicitly reference Donald Trump's populist campaign for the US presidency, but alluded to the Republican nominee's platform as he argued for the benefits of free trade.

"We know that isolationism, that building walls, that closing in on oneself, does not create opportunity, does not create growth, does not create benefits for the middle class," he said.

Chinese President Xi Jinping -- whose country is regularly accused of dumping and other trade violations by the US and EU -- also warned against protectionism at the same forum.

"The path of world economic development shows that openness brings progress and isolation leads to backwardness," he said in a speech.

"The beggar thy neighbour approach will not help any country to get out of the crisis or recession," he said. "In the age of economic globalisation, countries are closely linked in their development, and they all rise and fall together."

China is not part of the Trans-Pacific Partnership, the US-led effort to create a giant free trade area around the Pacific Ocean.

The two leaders' comments came after IMF chief Christine Lagarde warned this week that the world's economies faced a potentially toxic mix of low long-term growth and rising inequality, creating political temptations to populism and raised trade barriers.

She warned of a "low-growth trap" -- high debt, weak demand, eroding work forces and labour skills, weakening incentives for investment and slowing productivity.

But analysts say the G20 summit is unlikely to achieve a breakthrough, as it is not taking place at a time of acute crisis which could prod governments to take action.