CHINA-ECONOMY: FORMER CENTRAL BANK CHIEF EXPRESSES CONCERN AT LUJIAZUI FORUM IN SHANGHAI
Former central bank chief Zhou Xiaochuan, speaking on a panel at the Lujiazui Forum in Shanghai on June 14, expressed concern over the impact of a protracted trade war. Specifically, he worried that other countries would devalue their own currencies to offset the trade war’s negative effects on the Chinese currency . He said “Problems arising in the trade sector are likely to trigger a competitive devaluation in many countries around the world“ and that "If everyone relies on competitive devaluation, the financial order of the entire world will be chaotic and nobody will benefit.”
Zhou Xiaochuan expressed the hope that the upcoming G20 Osaka Summit could address the issue -- although, not through a Xi-Trump meeting -- adding that the Financial Stability Board should focus on this issue and give a stability signal to the global financial market. Interesting is that Zhou Xiaochuan’s remarks imply that he sees more weakness coming for the CNY.
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