The senior-most official for China’s banking regulatory system has harshly rebuked the US for the adoption of protectionist measures and profligate stimulus policies that he says will have an extremely adverse impact on the global financial system.
In an essay written for Qiushi Guo Shuqing (郭树清), chair of the China Banking and Insurance Regulatory Commission (CBIRC) and party secretary of the Chinese central bank, accused the US of undermining global trade cooperation and financial stability via discriminatory practices.
“The US has included the enterprises and organisations of China and certain other countries on an entity list, and has frequently caused trouble,” said Guo.
“These methods threaten regular economic and trade cooperation and add more variables to the recovery of the global economy…financial stability and financial security have all been disrupted.”
Guo also included other OECD nations in his criticisms of populism-fuelled trade protectionism.
“What’s regrettable is that at present the cooperative atmosphere of the international community is far from ideal. In recent years, a minority of developed countries have seen their own economic structures continue to worsen, leading to divisions and contention between social classes, and constantly increasing extremism and populism.
“Trade protectionism is flourishing, ‘withdrawal,’ ‘decoupling’ and ‘severing’ are increasing, and [these countrues] have publicly adopted strategies to pressure and contain China.”
Guo had particularly harsh words for the monetary and fiscal policies adopted by the US and other countries to deal with the economic impacts of COVID-19.
“At present many countries – and developed countries in particular, have adopted strong stimulus measures, and some countries are implementing limitless quantitative easing policies and using both monetary and fiscal policy to unleash large volumes of liquidity onto the market.
“In the short-term this method is of benefit to stabilising the economy and finance, but the medium and long-term results are subject to very sizeable uncertainties…there is no such thing as a free lunch.
“In the US dollar-led international monetary system, the unprecedented and limitless quantitive easing policies currently implemented by the US are in fact consuming the credibility of the US dollar, and eroding the foundations of global financial stability.
“This will have negative impacts that are hard to imagine.”