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IMF calls for increased collaboration to reduce trade tensions

April 15, 2019 04:18

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Summary
[IMF calls for increased collaboration to reduce trade tensions] International Monetary Fund (IMF) decision-making body International Monetary and Financial Committee on the 13th called on countries to continue to take measures to reduce global economic risks, and clearly warned that trade tensions remain, the global economy may not be next year Will pick up. The participating parties also held heated discussions on topics such as economic policy and IMF reform. (Economic Information Daily)

InternationalMonetary FundOrganization (IMF) decision-making body internationalcurrencyOn the 13th, the Financial Commission called on countries to continue to take measures to reduce global economic risks, and clearly warned that trade tensions remain the same, and the global economy may not pick up next year. The participating parties also held heated discussions on topics such as economic policy and IMF reform.

  Trade tensions remain the main challenge

The 39th Ministerial Conference of the International Monetary and Financial Committee concluded in Washington on the 13th. The communique issued after the meeting said that the global economic growth slowed down and the risks were still biased downward. These risks include trade tensions, policy uncertainty, geopolitical risks, and sudden and sharp tightening of the financial environment in the context of limited policy space, historically high debt levels, and increased financial vulnerability. At the same time, other long-standing challenges remain.

The communique pointed out that the global economy continues to expand, but the pace is slower than last October's expectations, and the growth rate is expected to pick up in 2020. The Chairman of the International Monetary and Financial Committee and South African Central Bank President Lessetia Canagogo said at the press conference on the same day that strengthening international cooperation and coping with global challenges through joint action is the theme of the communique. “We agree that we must act quickly to protect economic growth,” he said.

In the face of trade tensions that have not yet slowed down, the communiqué pointed out that free, fair and mutually beneficial trade and investment in goods and services is the main engine of economic growth and job creation.

When talking about trade, Chen Yulu, deputy governor of the People's Bank of China, said that the IMF should continue to support an open, inclusive and rule-based multilateral trading system. China is willing to strengthen cooperation with all parties, safeguard and improve international rules, promote fairer, more stable and more transparent trade policies, support trade and investment liberalization and facilitation, and oppose trade protectionism. In addition, all parties should continue to advocate for enhanced cooperation under a multilateral framework to avoid policy failures, enhance resilience and jointly address global challenges.

During the meeting, the EU intends to formulate policies to counter trade sanctions against the United States. According to EU diplomats, the European Commission has drawn up a list of US imports worth about 20 billion euros (about 22.6 billion US dollars), after President Trump threatened to impose tariffs on EU products worth 11 billion US dollars. .

European Central Bank President Mario Draghi told financial decision makers in other countries during the meeting that the growth prospects of the euro zone depend on the rest of the world and are concerned about the escalation of trade friction. “The outlook for the Eurozone is fundamentally dependent on the momentum of global economic growth,” Draghi said. “The escalation of trade tensions, the decline in global manufacturing and the rotation of the technology cycle have increased the external resistance of the Eurozone.”

According to the communique, the parties promised that in order to stabilize economic growth, all parties will continue to mitigate risks and improve resilience and, if necessary, act together to support growth and safeguard global interests.

  Emphasis on policy sustainability

According to the post-meeting communique, the International Monetary and Financial Committee made recommendations on the sustainability of monetary and fiscal policies.

The communique pointed out that in fiscal policy, policy flexibility should be maintained to make it conducive to economic growth and to achieve an appropriate balance between ensuring debt sustainability, supporting demand while avoiding procyclicality and maintaining social goals. .

According to the communique, in terms of monetary policy, it should be ensured that inflation continues to approach the target or stabilizes at a level close to the target, and inflation expectations continue to be effectively anchored. The central bank needs to continue to communicate effectively and make decisions based on data. The committee said it will continue to monitor and address financial vulnerabilities and emerging financial stability risks when necessary.

In terms of the policy tone, the Chinese representative gave a "reassuring" voice. Chen Yulu pointed out during the meeting that China will improve the dual-pillar regulation framework of monetary policy and macro-prudential policy, accelerate the construction of financial market infrastructure, improve the disposal mechanism of financial institutions, and continue to improve the exchange rate formation mechanism to maintain a reasonable balance of the RMB exchange rate. Basically stable. At the same time, China will further expand the opening of the financial industry, achieve institutional and systemic openness, and treat Chinese and foreign financial institutions equally in a more transparent and internationally compliant manner. China calls on all parties to complete according to the established timetablefundOrganizing the 15th total share inspection, the share of a dynamic economy can be increased to a level consistent with its relative position in the world economy. China calls on the IMF to continue to support an open, inclusive and rule-based multilateral trading system, and is willing to strengthen cooperation with all parties to promote economic globalization in a more open, inclusive, inclusive, balanced and win-win direction.

  The reform process is expected

The IMF reform is also a hot topic for all parties involved. The reform process is actively supported by members including China.

The meeting reaffirmed its commitment to maintaining a strong, share-based, well-resourced International Monetary Fund and maintaining its central role in the global financial safety net. The meeting noted the Fund's recent 15th General Review of Progress Report submitted to its Board of Directors and requested the Executive Board to promote the Fund's resources and governance reform as the most important task, up to the 2019 annual meeting. Complete the 15th total share inspection work and report. The meeting called for the full implementation of the 2010 IMF governance reform.

For the IMF reform, Chen Yulu said that the G20 summit and the meeting have made many commitments to complete the 15th general inspection of the shares according to the agreed timetable, so that the share of the dynamic economy can be increased to At a level of relative status in the world economy, “we should pay attention to the serious importance of these commitments.”

Chen Yulu pointed out that China supports a strong, share-based, resource-rich IMF and maintains its core role in the global financial safety net. He said that the share not only supports the IMF's ability to borrow, but also affects the representativeness, governance and legitimacy of the IMF. The IMF share reform should objectively reflect the relative position of member states in the global economy, while enhancing the voice and representation of emerging markets and developing countries.

(Article source: Economic Reference)

                (Editor: DF387)

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