China says only joint action, not exchange rates alone, can address global imbalances
Quick Look
People's Bank of China Governor Pan Gongsheng said at a G20 meeting in Bangkok that exchange-rate adjustments alone cannot resolve global economic imbalances and urged surplus and deficit economies to share responsibility, emphasizing the need to consider financial channels like capital flows.
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Why It Matters
Global economic imbalances refer to persistent disparities in current account balances between countries, with some nations running large surpluses and others large deficits, often debated in international forums like the G20.
China’s central bank chief has said exchange-rate adjustments alone cannot resolve global economic imbalances, calling on surplus and deficit economies to share responsibility for addressing them.
Speaking at the third G20 finance ministers and central bank governors’ meeting in Bangkok on Thursday, Pan Gongsheng, governor of the People’s Bank of China (PBOC), called for a “more comprehensive analytical perspective” on global imbalances.
“We should look beyond the current account to financial channels, paying greater attention to how financial factors such as capital flows affect imbalances, particularly as global financial integration deepens,” he said, according to a PBOC readout.
Open Questions
- What specific policy measures did Pan Gongsheng propose beyond exchange-rate adjustments?
- How did other G20 finance ministers and central bank governors respond to his remarks?
- What is the timeline for further discussions on this topic within the G20 framework?
