China wants constructive solution to trade war
BEIJING: China’s central bank governor Yi Gang said the nation is seeking to solve trade tensions with the US constructively and will continue to open up its services industry, especially the finance sector.
The risks from the trade conflict are “significant”, hurting global growth and causing uncertainty in financial markets, Yi said at a Group of 30 international banking seminar held on the sidelines of the International Monetary Fund and World Bank’s annual meetings in Bali yesterday.
“The trade tensions have been a problem because it causes negative expectations, it creates uncertainties so people are nervous,” he said. “There are tremendous uncertainties ahead of us.”
While China’s economy is still showing steady growth – with data next week likely to show expansion of 6.6% in the third quarter – the tariff war has damped investor sentiment, driving the Chinese currency down more than 9% against the US dollar in the past six months and pushing the nation’s benchmark stock index into bear market.
Yi said the dispute will not only hurt China but also its major trading partners, and a constructive solution is better than a trade war, which is a “lose-lose situation”.
Nevertheless, China is preparing for a protracted conflict, he said.
“We prepare for the worst. You see a lot of people in China are preparing for the trade tension to be a prolonged situation,” the governor said. “We have a very sincere view that we should seek a constructive solution – not only for us, but our neighbours in the supply chain and for the world.”
He said China will follow its principles when negotiating with the US, responding to a question from Mexico’s ex-president Ernesto Zedillo on what the government has learned from the recent trade agreement between the US, Canada and Mexico.