The head of IMF appealed yesterday to the US and China to cool their
dispute over technology policy and play by world trade rules, as
tumbling share prices drove home potential perils from a clash between
the world’s two biggest economies.To get more
china business news, you can visit shine news official website.
Global
economic growth is slowing but remains strong, Christine Lagarde,
managing director of the International Monetary Fund, said on the
sidelines of the IMF-World Bank annual meeting, being held this week on
the Indonesian island of Bali.
Countries are mostly in a “strong
position,” she said, “which is why we believe we are not seeing what is
referred to as ‘contagion.’”
But the gyrations that rocked Wall
Street the day before and Asia and Europe yesterday, taking the Shanghai
Composite index down 5.22 percent and Japan’s Nikkei 225 nearly 4
percent, do partly reflect rising interest rates in the US and some
other countries and growing uncertainty over trade, she said.
“It’s
the combination of the two that is probably showing some of the
tensions that we see in terms of indices, short-term indicators as well
as possibly market volatility,” Lagarde said.
The US and Chinese exchanges of penalty tariffs in their dispute isn’t helping, she said.
Her advice was threefold: “De-escalate. Fix the system. Don’t break it.”
She
acknowledged that the World Trade Organization, based in Geneva, has
made scant headway in recent years toward a global agreement on trade
rules that can address issues like complaints over Chinese policies US
President Donald Trump says unfairly extract advanced technologies and
put foreign companies at a disadvantage in a quest to dominate certain
industries.
“Our strong recommendation is to escalate work for a
world trade system that is stronger, that is fairer and is fit for the
purpose,” she said in opening remarks.
Somewhat obliquely, she
said policies aimed toward an excessively “dominant position” were not
compatible with free and fair trade.
The IMF has downgraded its
forecast for global economic growth to 3.7 percent this year from its
earlier estimate of 3.9 percent.
It also issued reports this week
on government finance and financial stability that warn of the risks of
disruptions to world trade.
The Wall