United States trade spat Needs Constructive Solutions: China central bank

Vastavam web: China’s central bank governor Sunday sought to cool the temperature on a brewing trade-and-currency war with the United States, calling for “constructive solutions” as the spat threatens to knock the world economy. Speaking on the last day of the IMF-World Bank annual meetings in Bali, Yi Gang warned that the stakes could hardly be higher and cautioned that a clash between the world’s two biggest economies was a “lose-lose” situation.

“Trade tensions…cause negative expectations, negative uncertainties,” he told a seminar with other top central bankers on the Indonesian holiday island. Yi said he had spoken to central bank governors and other top officials from a string of nations amid a tit-for-tat US-China tariff battle and Washington’s accusations that China was unfairly pushing down the value of its yuan currency to boost exports.

His comments come a day after the IMF warned that the “window of opportunity” to keep global growth on track was narrowing as the US-China spat threatens to boil over and emerging markets feel the pinch from higher US interest rates. Tensions have soared recently with President Donald Trump’s administration rolling out billions of dollars in tariffs against China in a bid to tackle its trade deficit and rein in what Washington considers unacceptable Chinese trade practices.

But he said he had told Yi this week about his concerns over the weakness of its currency. Mnuchin, speaking earlier on the Bali meeting’s sidelines, declined to comment on whether Washington would declare Beijing a “currency manipulator” in a Treasury report due out next week. That would be a first for China, triggering a process that could lead to punitive steps.