Nusa Dua: The heads of the World Bank and IMF on Thursday urged the US and China to play by world trade rules and de-escalate a dispute over Beijing’s technology development strategy that threatens to do lasting damage to the global economy. Christine Lagarde, MD of IMF, said she would advise Beijing and Washington to cool down, fix aspects of the world trading system that need fixing and “don’t break it.”
Lagarde and World Bank President Jim Yong Kim spoke separately on the sidelines of the lenders’ annual meeting in Bali. The event brings together finance ministers and central bankers from many economies, amid tight security: a line of armed personnel carriers were lined up alongside a beach path and access to the area was tightly controlled.
Lagarde said that so far there had been no “contagion” of major damage from penalty tariffs imposed by the two countries on each other’s exports, but that they do risk hurting “innocent bystanders.” Lagarde said her advice was in three parts: “De-escalate. Fix the system. Don’t break it.” The rules-making WTO has ways of addressing US complaints that China’s policies unfairly extract advanced technologies and put foreign companies at a disadvantage in its push to dominate certain industries, she said.