China blocks G20 consensus on trade imbalances as 19 members back calls to curb export dependence and non-market economic practices…reports Asian Lite News Desk
China blocked consensus at a meeting of G20 finance ministers and central bank governors after objecting to proposals addressing persistent trade imbalances and non-market economic practices, US Treasury Secretary Scott Bessent said.
The remaining 19 members backed a chair’s statement calling on countries with excessive external surpluses to remove policies that constrain domestic consumption and increase reliance on exports. India was among the members supporting the statement.
“It is clear that the country with the world’s largest and unsustainable current account surplus, the People’s Republic of China, was the dissenter,” Bessent told reporters on Tuesday (local time) following the two-day meeting in Asheville, North Carolina.
“We have 19 other voices, and as I said, my chairman’s statement will echo that,” he said.
The statement said excessive and persistent imbalances could distort markets, weaken supply chains and create adverse effects in other economies. It called on countries to eliminate non-market policies and practices that contribute to such imbalances.
China objected to four sections covering energy trade and the Strait of Hormuz, global economic imbalances, International Monetary Fund surveillance and sovereign debt restructuring.
Bessent said the agreement among the other members reflected growing international concern about economies heavily dependent on subsidised production and exports.
“Around the globe, we believe that non-market-based economies pushing out a never-ending stream of cheap exports is not sustainable,” he said.
“I think that the fact that 19 countries did want to address this shows the sheer enormity of the problem and that we agree,” Bessent added.
He declined to say whether individual G20 members would introduce tariffs or other trade protections in response.
“I’m not going to presume to say what the other countries would do,” he said. “So the way forward will be for all the individual countries, but we do see that there is great alignment.”
The chair’s statement called on countries with excessive external surpluses to remove distortions that restrict domestic consumption and make exports an outsized source of growth. Countries with persistent deficits were urged to support domestic savings and pursue fiscal consolidation.
G20 members also asked the IMF to strengthen its examination of the causes of global imbalances, including distortive economic policies and their spillover effects. They sought more detailed scenario analysis on the costs of failing to act.
Bessent said the lack of unanimity did not diminish the meeting’s outcome.
“I do think it is incredible to get 19 countries to agree to anything,” he said.
The meeting also covered private sector-led growth, sovereign debt, financial literacy, artificial intelligence and financial regulation.
Business leaders joined finance ministers and central bank governors for the first time in the history of the G20 Finance track, Bessent said.
“For the first time in G20 history, business leaders joined ministers and central bank governors to discuss the practical barriers they encounter as they invest, innovate, and grow,” he said.
The G20 comprises 19 major economies, the European Union and the African Union. Its members account for most of the world’s economic output, international trade and population. Decisions are normally reached by consensus but are not legally binding.
India held the G20 presidency in 2023, while the United States holds the presidency in 2026.
