People’s Bank of China Governor Yi Gang (易綱) yesterday sought to cool the temperature on a brewing trade and currency war with the US, calling for “constructive solutions” as the spat threatens to knock the world economy.
Speaking on the last day of the IMF-World Bank annual meetings in Bali, Indonesia, Yi said that the stakes could hardly be higher and cautioned that a clash between the world’s two biggest economies was a “lose-lose” situation.
“Trade tensions ... cause negative expectations, negative uncertainties,” he told a seminar with other top central bankers on the Indonesian holiday island.
Photo: Bloomberg
“There are tremendous uncertainties ahead of us. The whole world should work together to seek constructive solutions,” he added.
Yi said he had spoken to central bank governors and other top officials from a string of nations amid a tit-for-tat US-China tariff battle, and Washington’s accusations that China was unfairly pushing down the value of its currency to boost exports.
Yi vowed Beijing would do its part by getting tougher on domestic copyright violators and opening up the financial services sector.
His comments come a day after the IMF said that the “window of opportunity” to keep global growth on track was narrowing as the US-China spat threatens to boil over and emerging markets feel the pinch from higher US interest rates.
Tensions have soared with US President Donald Trump’s administration rolling out billions of US dollars in tariffs against China in a bid to tackle its trade deficit and rein in what Washington considers unacceptable Chinese trade practices.
US Secretary of the Treasury Steven Mnuchin earlier downplayed the global concerns expressed at the meetings, saying the world would benefit if Beijing is forced to changes its trade policies.
However, he said he had told Yi this week about his concerns over the weakness of its currency.
Mnuchin, speaking earlier on the Bali meeting’s sidelines, declined to comment on whether Washington would declare Beijing a “currency manipulator” in a Treasury report due out next week.
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