The head of the International Monetary Fund said Trade Tensions between the United States and China posed a big threat to global confidence and investment.
But the IMF’s Managing Director, Christine Lagarde, said it would be a mistake to attribute the potential damage solely to the current tariffs dispute.
CGTN’s Daniel Ryntjes reports.
The threat of an escalating trade war between the United States and China could undermine the real drivers of global growth, according Lagarde.
But, she said it would be a mistake to break down the potential damage based purely on the current tariff threats.
“It’s not very substantial when you measure in terms of GDP, we’re talking about decimals in most cases. What is more important is something that is difficult to measure in the short term, and that has something to do with the erosion of confidence, when investors do not know under what terms they will be when they don’t know how to organize their supply chain, they are reluctant on investing,” Lagarde said.
The IMF said technological change played a significant role in dislocating people from the benefits of global trade.
The World Bank is concerned that African countries are not prepared to compete in an increasingly digital economy.
“Many of the low skilled jobs will be taken over by technology. Now, there’s also tremendous hope for technology, I think there’s tremendous hope that technology could help some African countries, many African countries we hope, leapfrog and go forward and find new ways of driving economic growth,” World Bank president Jim Yong Kim said.
Jim Yong Kim says the World Bank is studying projects in rural China to increase financial inclusion, including efforts by Chinese tech firms like Tencent and Alibaba to provide low-cost loans to support new entrepreneurs.
Both the IMF and World Bank are exploring multiple ways in which technological tools like blockchain technology can be redeployed to benefit those who have been left out.