PBOC governor: U.S. tariffs put emerging markets and developing countries at risk

Pan Gongsheng, governor of the People's Bank of China (PBOC), the country's central bank, attended the 51st Meeting of the International Monetary and Financial Committee (IMFC) in Washington, D.C., where he delivered remarks.

Pan stressed that the current momentum of global economic growth remains weak, with prominent downside risks. The recent abuse of tariffs by the United States has severely violated the legitimate rights and interests of other countries, seriously undermined the rules-based multilateral governance system, dealt a heavy blow to the global economic order, and hurt the long-term stability and growth of the global economy.

It has also triggered sharp fluctuations in global financial markets, particularly in advanced economies. This has threatened global financial stability, and posed grave challenges to emerging market economies and developing countries.

It is urgent for countries to strengthen macroeconomic policy coordination, support the multilateral trading system, promote economic globalization in a more open, inclusive, universally beneficial and balanced direction, and jointly safeguard global economic and financial stability, he continued.

Upholding true multilateralism, China is the advocate for economic globalization and free trade, and the defender and supporter of the World Trade Organization, Pan said, adding that China is actively engaging in global economic governance and is committed to the development of an open world economy. China is willing to further deepen cooperation with the IMF and support it in playing a more prominent role in safeguarding global economic and financial stability, he said.

Additionally, Pan stressed the urgency of advancing the IMF quota reform, describing quota share adjustments as a critical component of the IMF governance reform. He argued that these changes are crucial for enhancing the institution's legitimacy, effectiveness and representativeness.

As the IMF is a quota-based institution, realigning quota shares is the most important part of its governance reform, Pan said. The realignment should be achieved as early as possible to reflect the relative weights of the members in the global economy, in particular to amplify the voice and representation of emerging markets and developing countries. 

China calls on all parties to complete their domestic procedures without delay so as to ensure the quota increase promised in the 16th General Review of Quotas (GRQ), he said. At the same time, the IMF should race against time and accelerate the preparation for the 17th GRQ, including the discussions of a new quota formula, so as to maintain its creditability, and to achieve a meaningful realignment of quota shares as soon as possible. 

The meeting, held from Thursday to Friday, addressed topics including the global economic and financial situation and the IMF's ongoing work.

China to adopt more proactive policies, further open up

Chinese Finance Minister Lan Fo'an, who attended the World Bank's 111th meeting of the Development Committee also in Washington, D.C., called for continued global cooperation to foster stability and shared prosperity.

Noting that current protectionist trade policies pose significant risks to global poverty reduction and development efforts, he said China calls on international organizations such as the World Bank to advocate principles such as non-discrimination and free trade, and to jointly uphold an open and cooperative international environment.

China is both a beneficiary and a contributor to global economic integration, with its contribution to global economic growth remaining around 30 percent in recent years, Lan said.

Amid the current complex external environment, China will adopt more proactive and effective macroeconomic policies to achieve its annual growth targets, continuing to provide stability and momentum to the global economy, he added.

Adhering to its fundamental national policy of reform and opening-up, China has granted zero-tariff treatment to products from all least-developed countries with which it has diplomatic relations, Lan said, adding that it is also willing to further open its doors, sharing its supersized market with the world to achieve mutual benefit and win-win outcomes.