Friday, 12 Jul 2024

China, major world bodies make case for free trade

Leaders of China and major global financial and economic institutions put up a stout defence of free trade and multilateralism yesterday while expressing concern with the growing trade tensions between China and the United States.

At a joint press conference with World Bank president Jim Yong Kim and International Monetary Fund (IMF) managing director Christine Lagarde, Chinese Premier Li Keqiang said the global economy would face downward pressure as a result of growing doubts over the liberal trading order.

These doubts were affecting confidence in the outlook for the global economy and economic recovery, Mr Li said. “It is important for us to uphold multilateralism and free trade under the current circumstances,” he added at the press conference held at the Diaoyutai State Guesthouse in Beijing.

Mr Li’s comments came a day after President Xi Jinping pledged to further open up China’s markets and boost support for free trade at the launch of a major import fair in Shanghai.

China, the world’s second largest economy, is embroiled in a trade war with the US, and both sides have imposed levies on hundreds of billions of dollars worth of each other’s products.

Dr Kim and Ms Lagarde yesterday pegged China’s gross domestic product (GDP) growth this year at 6.5 and 6.6 per cent, respectively, and both forecast a slowdown to 6.2 per cent next year.

Ms Lagarde flagged trade tensions as one of the clouds on the horizon, noting that the effects on GDP as a result are “particularly strong for both China and the US”. She noted that IMF models predicted trade tensions would knock 0.6 and 0.2 percentage point off next year’s GDP growth for China and the US, respectively.

The IMF chief urged China to continue to open up its economy. “It is not only in China’s best interests but it has also added benefits for the rest of the world,” she said.

World Trade Organisation director-general Roberto Azevedo pointed out that while trade tensions could undermine the global recovery, they had also sparked an upsurge in voices of support for the multilateral trading system, with China “clearly one of them”.

Earlier, Mr Li said China would enhance dialogue and seek solutions through negotiations, adding that it was ready to work with international organisations and other parties to “engage in equal dialogue on the basis of mutual respect to pursue solutions that can work for all parties”.

But he also said China had “ample means and tools to tackle the difficulties” and sustain growth, citing the country’s large domestic market and human resources.

Before the press conference, Mr Li held a closed-door meeting with Dr Kim, Ms Lagarde, Mr Azevedo, Organisation for Economic Cooperation and Development secretary-general Angel Gurria, Financial Stability Board chairman Mark Carney, and International Labour Organisation deputy director-general Deborah Greenfield.

This is the third edition of the so-called “1+6” Roundtable, with the first one taking place in 2016.

Said Mr Li: “Our roundtable is to send a message on multilateralism and free trade, and also a message about China’s readiness to further cooperate with the rest of the world.”

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