Countries around the world are working to diversify their supply chains and reduce their dependence on China, which is “probably good for everyone,” World Bank President David Malpass said on Tuesday. Malpass said cross-border trade would remain important to the global economy, and China – already the world`s second largest economy and likely to become the largest – had a big role to play as both a consumer and producer of goods. But, speaking at an event in Warsaw, he said China also needed to be part of a value system shared by other countries in the global trading system, and added, “I don’t know that that will happen.”
“So I guess the way I think of it is that the world needs to interact with China, recognizing that it’s important in the world and growing in importance,” Malpass said. He also said he did not believe the world was facing a new “Bretton Woods Era”, one that would reshape the international financial structure and allow the World Bank and international It is a tribute to the 1944 conference that launched the Monetary Fund.
Asked about whether China was headed for a crisis due to severe COVID-19 lockdowns and debt problems in its property sector, Malpass said: “They’re having setbacks, major setbacks in various areas, and the forecasts for growth have been brought down.” But he said the World Bank continues to work well with China, which is a major shareholder and a borrower whose use of the lender’s financing is shrinking. The bank is also working closely with China to encourage more transparency its lending to developing countries, Malpass said.
The U.S. dollar-centric system “works pretty well,” he added. “We don’t feel like we’re at that point at all right now. There’s no sense that the world is lost,” Malpass said. “Indeed, most of the world has this unity in efforts to end the war in Ukraine.”
News Summary:
- Supply chain diversification from China is likely beneficial to everyone
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