Global finance leaders grapple with globalization fears

Zhou Xiaochuan Governor of the People's Bank of China attends a news conference in Beijing

Zhou Xiaochuan Governor of the People's Bank of China attends a news conference in Beijing

"The use of the word protectionism is very ambiguous", he told reporters at the conclusion of the meetings.

"So far, we have not seen any significant impact on South Korea's trade investments", Markus Rodlauer, deputy director of the Asia-Pacific department at the International Monetary Fund, said during a press briefing, referring to the risk of geopolitical tensions.

A communique from the IMF's steering committee on Saturday dropped an anti-protectionism pledge, adopting language that the Trump administration sought last month in Germany as it develops its strategy to reduce USA trade deficits.

However, she also pointed to some "clear downside risks" - "political uncertainty, including in Europe; the sword of protectionism hanging over global trade; and tighter global financial conditions that could trigger disruptive capital outflows from emerging and developing economies". It's unclear how far the new administration will go in resisting the global status quo.

In its communique, the International Monetary Fund urged nations to avoid "inward-looking policies", but it did not include tougher language the International Monetary Fund had used in an October statement in which it had called on all countries to "resist all forms of protectionism". The IMFC is the IMF's top advisory panel, and is composed of 24 ministers and central bankers from nations including the U.S., China, Germany, Japan and France. The draft IMFC statement reiterated pledges from October to "refrain from competitive devaluations" of currencies and to avoid targeting "our exchange rates for competitive purposes".

In conclusion, the CBI statement predicts that in light of the collective monetary, fiscal, trade and foreign exchange policies, strengthening of local supply and an improvement in liquidity management, " a good level of economic growth would result in tandem with the single-digit inflation" during the current fiscal year that began on March 21.

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The outlook for the world economy is sunnier than six months ago, with the statement saying that the "global economic recovery is gaining momentum, commodity prices have firmed up, and deflation risks are receding". "There is evidently a need to better communicate the benefits of trade and globalization".

Like many other officials at the meeting, he warned in his statement that "rising anti-globalisation and protectionism sentiment against worldwide trade and investment pose challenges to global growth".

Germany's finance minister, Wolfgang Schaeuble, says more protectionism and countries retreating from globalization will result if more isn't done.

The communique largely adopted the trade language from a G20 statement issued last month in Baden Baden, Germany, where U.S. Treasury Secretary Steven Mnuchin had said the anti-protectionism pledge was no longer relevant.

Mnuchin said the global economy continues to exhibit large and persistent external imbalances, "which contribute to the sentiment that the existing worldwide monetary and trading system does not benefit all".

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