Ply­ing free trade

PBOC’s Yi Gang says per­spec­tive needed on world econ­omy

China Daily (USA) - - FRONT PAGE - By CHEN WEIHUA chen­wei­hua@chi­nadai­lyusa.com

A se­nior Chi­nese banker cham­pi­oned free trade and glob­al­iza­tion in Wash­ing­ton on Thurs­day while an­ti­trade and anti-glob­al­iza­tion sen­ti­ment per­me­ates ma­jor economies from the United States to United King­dom.

Yi Gang, deputy gover­nor of the Peo­ple’s Bank of China, the cen­tral bank, said that peo­ple need to look at a longer time frame in his­tory, say­ing the anti-trade sen­ti­ment can last for only two years.

Anti-trade sen­ti­ment has run strong on the US pres­i­den­tial cam­paign trail, with both can­di­dates, Don­ald Trump and Hil­lary Clin­ton, op­pos­ing the Trans-Pa­cific Part­ner­ship (TPP) trade agreement. Antiglob­al­iza­tion feel­ing also was a ma­jor force be­hind the Brexit — UK’s vote in June to exit the Euro­pean Union.

Yi said that maybe three years or five years later, peo­ple will again have the con­sen­sus for free trade and glob­al­iza­tion. “And that is the cor­rect di­rec­tion to go,” he said at the CNN Global Econ­omy De­bate.

Other pan­elists at the talk, held at the In­ter­na­tional Mone­tary Fund head­quar­ters in Wash­ing­ton, in­cluded Chris­tine La­garde, the IMF manag­ing direc­tor; Mark Car­ney, gover­nor of the Bank of Eng­land and chair­man of the G20’s Fi­nan­cial Sta­bil­ity Board, and Wolf­gang Schauble, fi­nance minister of Ger­many.

“Be­cause if you look (at his­tory longer), if you look at the Great De­pres­sion his­tory, if you look at the com­pet­i­tive de­val­u­a­tion his­tory, if you look at the cur­rency war his­tory, and iso­la­tion his­tory, none of them are work­ing,” Yi told a packed au­di­ence of fi­nan­cial lead­ers from around the world at­tend­ing the 2017 IMF/World Bank an­nual meet­ing.

Yi be­lieves that if peo­ple look deeper into his­tory and into the fu­ture, they will have more con­fi­dence to im­prove the sys­tem and make the world bet­ter.

“I am a be­liever of free trade. I think free trade will pro­mote the wel­fare of mankind,” he said.

Yi em­pha­sized that peo­ple need to pay se­ri­ous at­ten­tion to in­clu­sive

I am a be­liever of free trade. I think free trade will pro­mote the wel­fare of mankind.” Yi Gang, deputy gover­nor, Peo­ple’s Bank of China

growth, ad­dress the prob­lems of un­even growth and un­even in­come dis­tri­bu­tion, as well as the con­cerns of small and medium en­ter­prises, Africa and emerg­ing mar­kets and de­vel­op­ing economies.

“That’s why this year at G20, we added the in­clu­sive growth into the agenda,” he said of the G20 Sum­mit held in East China’s city of Hangzhou in early Septem­ber.

He ex­pressed China’s hope to help im­prove the cur­rent global sys­tem, such as mak­ing de­vel­op­ing coun­tries more rep­re­sen­ta­tive in in­ter­na­tional gov­er­nance and get­ting their voices heard.

La­garde cited the fact that four emerg­ing economies are now among IMF’s top 10 share­hold­ers as a ma­jor achieve­ment of her or­ga­ni­za­tion in the past years.

Yi as­sured the au­di­ence that China’s eco­nomic tran­si­tion is well un­der way, say­ing the Chi­nese econ­omy is more sta­ble now than be­fore, cit­ing that con­sump­tion con­trib­uted to 70 per­cent of eco­nomic growth in the past two years while em­ploy­ment is ro­bust.

He said the do­mes­tic con­sump­tion mar­ket will con­tinue to ex­pand, and the im­ports from the rest of the world will also con­tinue to grow. “That is a sig­nif­i­cant con­tri­bu­tion to the global growth,” he said.

An IMF re­port on the Asian econ­omy re­leased on Thurs­day said that con­sump­tion growth in China re­mains par­tic­u­larly strong, con­sis­tent with the on­go­ing re­bal­anc­ing to­ward a con­sumer- and ser­vices­sec­tor-ori­ented econ­omy.

CHEN WEIHUA / CHINA DAILY

From left: Peo­ple’s Bank of China Deputy Gover­nor Yi Gang; Bank of Eng­land Gover­nor Mark Car­ney; IMF Manag­ing Direc­tor Chris­tine La­garde; and Ger­man Fi­nance Minister Wolf­gang Schauble speak at the CNN Global Econ­omy De­bate at the IMF Head­quar­ters in Wash­ing­ton on Thurs­day. The talk was mod­er­ated by CNN an­chor Richard Quest.

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