China has fired back at critics of its trade imbalances at a two-day meeting of Finance Ministers and Central Bank Governors of the Group of 20 nations. People’s Bank of China Governor Pan Gongsheng denied that China pursues trade surpluses, while also vowing that it would not weaponize the yuan to boost exports. He said the country remained committed to expanding domestic demand. “Addressing global imbalances requires all countries to promote their own structural reforms,” Pan said. Speaking after the G20 meeting, U.S. Treasury Secretary Scott Bessent called China’s current account surplus “unsustainable” and blamed Chinese opposition for preventing the G20 from issuing a unanimous statement. The U.S. Treasury pointed to four specific paragraphs that China had objected to, including one on taking steps to “eliminate non-market policies and practices that exacerbate imbalances”. “In particular, countries with excessive and persistent external surpluses should remove distortions that constrain domestic consumption and that result in an overreliance on exports for growth,” that paragraph added.
China’s Commerce Ministry Spokeswoman Huang Ling refuted Bessent’s remarks. “The use of multilateral forums such as the G20 to hype up so-called ‘economic imbalances’ and ‘overcapacity’ is essentially promoting protectionism and seeking pretexts to exert pressure and restrictions on China,” Huang said. At the G20 meeting, which took place in the U.S. state of North Carolina, Governor Pan added that deficit countries should cut fiscal deficits and raise saving rates, while surplus countries should promote consumption and investment growth. “China has neither the need nor the intention to gain a competitive advantage in trade through currency devaluation,” Pan said.
China also opposed a section urging the International Monetary Fund (IMF) to strengthen its surveillance of structural drivers of global imbalances, as well as wording that addressed debt challenges and improving debt sustainability. It also objected to a paragraph expressing concerns over disruptions in the Strait of Hormuz, a critical Middle East chokepoint for global oil shipments. The Chinese Foreign Ministry said that China “deeply regrets” that a unanimous statement was not possible at the G20 meeting, adding that members should coordinate on global economic issues in an objective, fair and balanced manner. In his speech at the meeting, Pan attributed the deepening global imbalances to rising trade protectionism, national security issues, and unpredictable policy, the South China Morning Post reports.
