Today, a vice governor of the central bank of China said that protectionism has been considered as a harmed mutual trust among nations. He said that it has also limited the scope for multilateral cooperation, taking a swipe at the “America First” trade policies of the Trump administration.
A vice governor at the People’s Bank of China (PBOC), Chen Yulu, urged the International Monetary Fund to continue its support on a rules-based multilateral trade system as the tariffs play “only a limited role” in fixing the bilateral trade imbalances.
In a statement to the steering committee of the IMF during the IMF and World Bank spring meetings in Washington, Chen stated: “The protectionism of some countries has harmed mutual trust among countries, limited the scope for multilateral cooperation, and impeded the willingness to achieve it.”
He added: “Unilateralism and protectionism can only exacerbate domestic imbalances and impair necessary structural adjustments, which can negatively affect the countries concerned as well as global growth.”
Chen also said that China will continue to impose “prudent monetary policy and proactive fiscal policy,” to make sure that its economic growth is kept stable.
The remarks came as Washington and Beijing seek a deal to put an end to a bitter trade war that is marked by tit-for-tat tariffs that have cost the two largest economies in the world billions of dollars, disrupted supply chains and rattled financial markets.
Recently, increasing hopes of an agreement have lifted global stock prices, even though the IMF has released a warning that the failure to reach an agreement could provoke a massive market backlash.
Chen stated: “Uncertainties from trade frictions, the negative impact of tariff increases on trade, and the disruptions of global supply chains have gradually emerged.”
He added: “Trade friction can also dampen market confidence, which in turn amplifies financial market volatility and has an impact on economic growth.”