G20, Except China, Agrees to Accelerate Reduction of Global Trade Imbalances
MacroGeopolitics
Finance ministers and central bank governors from the G20, excluding China, agreed on Tuesday (September 1) on the importance of abolishing policies that do not conform to market mechanisms to curb global trade imbalances. The G20 chair's statement after the two-day meeting in Asheville, North Carolina, said member countries should take measures to eliminate non-market policies and practices that exacerbate imbalances. Meanwhile, finance ministers and central bank governors of other member countries affirmed that countries with large and sustained external surpluses should eliminate distortions that limit domestic consumption and lead to excessive reliance on exports for growth. The meeting took place as many countries worldwide face difficulties in controlling long-term bond yields, with little hope that the war between the US-Israel and Iran will end soon. US Treasury Secretary Scott Bessent spoke at the opening of the morning session on the rising public debt issues in emerging market and developing economies. On the second day of the meeting, G20 financial leaders discussed global trade imbalances, with China's chronic industrial overcapacity being a key issue. However, China has consistently rejected Western criticism that it allows cheap goods to flood global markets due to massive government subsidies to businesses. Initially, the US aimed to issue a joint statement after the two-day talks, but Bessent revealed that the meeting could not reach a consensus on wording regarding global economic imbalances due to China's objections.
