Protectionism biggest threat to global economy

China will further push reforms to cope with future challenges: PBC governor

China will further push reforms and increase openingup levels to cope with future challenges, Yi Gang, governor of the People’s Bank of China (PBC), the country’s central bank, was quoted as saying in an article published on the official website of the PBC on Saturday.

Yi made the comment at the G20 Meeting of Finance Ministers held in Washington on Thursday and Friday as trade frictions between China and the US escalate, which pose a serious threat to a fair trade environment across the world.

“Trade protectionism and the faster-than-expected normalization of monetary policies in major economies are now the biggest risks faced by the global economy,” Yi said.

Yi also cautioned that the trade dispute between China and the US is currently bringing dramatic uncertainty to China’s financial markets as well as capital flow.

Zhou Yu, director of the Research Center of International Finance at the Shanghai Academy of Social Sciences, told the Global Times on Sunday that the trade skirmish will hurt both the US and China, adding that the US side is also weighing the impact of a prolonged trade dispute on its economy.

According to Zhou, history has shown that trade protectionism leads to economic and political friction, while free trade helps the global economy flourish.

He also added that tax punishment, like what the US has done to China, won’t exactly solve the trade gap problems that are bothering the US right now, because it won’t enhance the quality of US-made products and because the country still needs to import from other countries, if not from China.

“I think signs have emerged that the US does not want to exacerbate the situation either,” Zhou said.

The Ministry of Commerce noted on Sunday that it welcomes US government representatives to Beijing to discuss the trade issues.

Zhou also stressed that with China’s little reliance on external demands, the US’ trade sanctions will not seriously impact the domestic economy. Instead, they might make domestic companies become more independent.

According to Yi, China’s economy is continuously improving, with major economic indicators all faring better than market expectations.

Demonstrating this, China posted a GDP growth rate of 6.8 percent in the first quarter of 2018, data from the National Bureau of Statistics showed.

Yi also stressed that China now has better employment conditions, stable price levels, a strong domestic consumption growth trend as well as an appreciating currency.

At the same time, the country’s economic growth structure and quality are also turning out better than expected, Yi noted.