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Home / World / As markets faint, financial leaders are urging the US, China, to cool them

As markets faint, financial leaders are urging the US, China, to cool them



NUSA DUA, Indonesia – World Bank and IMF leaders on Thursday appealed to the US and China to cool down their dispute over technology policy and stagger according to world trade rules Stock prices fueled potential dangers from a clash between the US and China two largest economies in the world.

Global economic growth slows but remains strong, said Christine Lagarde, executive director of the International Monetary Fund, on the sidelines of the IMF World Bank Annual Meeting this week on the Indonesian island of Bali.

Countries are usually in a "strong position," she said, "so we believe we do not see what's called" contagion. " [1

9659007] But the fluctuations that shook Wall Street the day before and Asia and Europe on Thursday, with the Shanghai Composite Index down 5.2 percent and the Japanese Nikkei 225 down almost 4 percent, are partly reflecting rising interest rates in the US and other countries "It's the combination of the two, which probably shows some of the tensions we see in terms of indices, short-term indicators and possibly market volatility," said Lagarde

The US and Chinese exchanges of punitive tariffs in their Dispute does not help, she said.

Her advice was threefold: "De-escalate, fix the system, do not break it."

She acknowledged that the Geneva-based World Trade Organization has made little headway in recent years towards a global agreement on trade rules, Addressing issues such as complaints about Chinese policies could unfairly drain cutting-edge technology and put foreign companies at a disadvantage in order to dominate certain industries.

"Our strong recommendation is to step up work for a stronger, fairer, and for this purpose, world trade system," she said in introductory remarks.

Somewhat wrongly, she said that policies aimed at an excessively "dominant position" were not compatible with free and fair trade.

The IMF has lowered its forecast for global economic growth this year to 3.7 percent from its previous estimate of 3.9 percent. He also issued public finance and financial stability reports this week to warn of the risks of disrupting world trade.

World Bank President Jim Yong Kim said the World Bank is working with developing countries to bring about further deterioration] "Trade is very critical because it has freed people from extreme poverty," Kim said. "I am a globalist, this is my job, it is our only chance to end extreme poverty, we need more trade, not less trade," he said.

Kim said the World Bank has introduced a "human capital index" to help countries increase their investment in education and health care.

Policies to build such human capital are among the "smartest investments that countries can make," he said.

He praised host country Indonesia, a Muslim-260 million Muslim country, for strong growth, but noted that there was plenty of room for improvement. The country ranks 87th out of 150 countries.

Indonesia has experienced a series of disasters in recent months. Before dawn on Thursday, an earthquake on Indonesia's Java island collapsed, killing at least three people, and more than 2,000 people were killed and possibly thousands more were left in the mud just two weeks after a severe earthquake and tsunami disaster in a central region of the archipelago Buried

On Thursday, the magnitude 6.0 quake north of Bali triggered the area where IMF World Bank delegates meet, but there was no sign of significant damage.

The annual financial meetings take place at a time of growing concern other than trade trends, such as: For example, the increase in borrowing costs in the US and some other regions to calm growth and keep inflation in check. Rising interest rates are pulling capital from emerging markets in Asia and Latin America at a time when growth in their exports is likely to slow.

Argentina and Pakistan, Venezuela and Zimbabwe are among the countries that are struggling with crises. Worries about slowing growth in China and rising debt in some developing countries due to projects related to Beijing's Belt and Road Initiative on developing ports, roads and other infrastructure are on the rise.

Lagarde said the IMF will send a team After meeting with Finance Minister Asad Umar in the coming weeks to Pakistan asking for emergency loans

The IMF chief did not say how much Umar had demanded. Analysts say that Pakistan is seeking $ 8 billion in loans to deal with a balance of payments crisis. The Pakistani currency collapsed about 7 percent earlier this week after the loan request became known.

When asked if the IMF's assistance could be a "bailout" for Chinese loans, Lagarde said that any help should be completely transparent.

"With every job we do, we need a complete understanding and full transparency about the type of debt a country bears," she said.

The annual Global Finance Summit brings together central bankers and finance ministers, development experts and civil society groups from around the world.

Bali has suffered terrorist bombings in the past, and the event was held under strict security. A convoy of armed troop-carriers lined up beside a lakeshore path and access to the area was strictly controlled.

Nonetheless, about a dozen activists involved in land grabbing and other World Bank-sponsored projects were holding peaceful protests about the cancellation of a conference to be held in the nearby city of Denpasar by the local authorities.

"If they never want to hear our voices, what kind of projects do we expect?" said Joan Salvador, a member of a Filipino women's group.

The participants had badges that allowed them to enter the closely guarded venue, and an IMF official said that they would convey their concerns "at the highest level."

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Associated Press journalist Hau Dinh contributed to this report.

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