China, WTO and IMF speak up in defence of free trade at annual meeting in Beijing

Chinese Premier Li Keqiang and International Monetary Fund chief Christine Lagarde after the third edition of an annual roundtable meeting in Beijing on Nov 6, 2018.
Chinese Premier Li Keqiang and International Monetary Fund chief Christine Lagarde after the third edition of an annual roundtable meeting in Beijing on Nov 6, 2018.PHOTO: AFP

BEIJING - Leaders of China and major global financial and economic insitutions put up a a stout defence of free trade and multilateralism on Tuesday (Nov 6) 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 managing director Christine Lagarde, Chinese Premier Li Keqiang said the global economy going forward 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, he said.

"It is important for us to uphold multilateralism and free trade under the current circumstances," Mr Li said at the press conference at the Diaoyutai State Guesthouse in Beijing.

The Chinese premier'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 currently 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 imports.

On Tuesday, Dr Kim and Ms Lagarde pegged China's GDP growth this year at 6.5 and 6.6 per cent respectively, and both forecast that growth will slow 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 t trade tensions would knock 0.6 percentage point and 0.2 point off next year’s GDP growth for China and the US, respectively.

The IMF chief urged China to stay the course and continue rebalancing the economy, noting that although it has slowed, growth was still strong and driven by domestic consumption and services as opposed to exports, investment and industry.

She also said China should 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 (WTO) director-general Roberto Azevedo pointed out that while trade tensions could undermine the global economic 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 that the country had "ample means and tools to tackle the difficulties", and sustain long term growth, pointing to China's large domestic market and human resources.

Before the press conference, Mr Li held a closed door meeting with Dr Kim, Ms Lagarde, Mr Azvedo, Organization for Economic Cooperation and Development (OECD) secretary-general Angel Gurria, Financial Stability Board (FSB) chairman Mark Carney, and International Labor Organization (ILO) 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 round-table 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."