Plying free trade
PBOC’s Yi Gang says perspective needed on world economy
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.
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.