NUSA DUA, Indonesia: China’s central bank governor Sunday sought to cool the temperature on a brewing trade-and-currency war with the United States, calling for “constructive solutions” as the spat threatens to knock the world economy.
Speaking on the last day of the IMF-World Bank annual meetings in Bali, Yi Gang warned that the stakes could hardly be higher and cautioned that a clash between the world’s two biggest economies was a “lose-lose” situation.
“Trade tensions...cause negative expectations, negative uncertainties,” he told a seminar with other top central bankers on the Indonesian holiday island.
“There are tremendous uncertainties ahead of us.
“The whole world should work together to seek constructive solutions,” he added.
Yi said he had spoken to central bank governors and other top officials from a string of nations amid a tit-for-tat US-China tariff battle and Washington’s accusations that China was unfairly pushing down the value of its yuan currency to boost exports.
His comments come a day after the IMF warned that the “window of opportunity” to keep global growth on track was narrowing as the US-China spat threatens to boil over and emerging markets feel the pinch from higher US interest rates.
Tensions have soared recently with President Donald Trump’s administration rolling out billions of dollars in tariffs against China in a bid to tackle its trade deficit and rein in what Washington considers unacceptable Chinese trade practices.
Treasury Secretary Steven Mnuchin earlier downplayed the global concerns expressed at the meetings, saying the world would benefit if Beijing is forced to changes its trade policies.
But he said he had told Yi this week about his concerns over the weakness of its currency.
Mnuchin, speaking earlier on the Bali meeting’s sidelines, declined to comment on whether Washington would declare Beijing a “currency manipulator” in a Treasury report due out next week.
That would be a first for China, triggering a process that could lead to punitive steps.
Attention has begun to turn toward hopes that Trump and Chinese President Xi Jinping could meet on the sidelines of the G-20 summit next month in Argentina and reach some sort of agreement that would reduce trade tensions.
US trade spat needs ‘constructive solutions’: China central bank
US trade spat needs ‘constructive solutions’: China central bank
- Tensions have soared recently with President Donald Trump’s administration rolling out billions of dollars in tariffs against China
- Attention has begun to turn toward hopes that Trump and Chinese President Xi Jinping could meet on the sidelines of the G-20 summit
Aramco rises nearly 3% as Gulf stocks fall on Middle East tensions
RIYADH: Saudi Arabian Oil Co. shares rose nearly 3 percent in intraday trading on March 1, outperforming regional markets as escalating tensions in the Middle East weighed on Gulf equities.
The stock climbed as much as 3.2 percent to SR25.76 ($6.87) before easing slightly to SR25.64, up 2.72 percent from the previous close of SR24.96, according to Tadawul data. More than 12 million shares were traded, with turnover exceeding SR306 million as of 12:20 p.m. Saudi time.
The gains came even as most Gulf markets declined after Israel and the US launched strikes on Iran, triggering retaliatory attacks and raising fears of a broader regional conflict.
The Kingdom’s benchmark Tadawul All Share Index dropped as much as 4.6 percent in early trading, putting it on track for its sharpest intraday fall since April, Reuters reported.
Elsewhere in the region, Boursa Kuwait suspended trading as a precautionary measure. Oman’s main index trimmed losses to 1.5 percent after falling more than 3 percent earlier, while Bahrain’s benchmark slipped 0.6 percent. Qatar’s market was closed for a bank holiday.
Investors are now closely watching oil markets, particularly the Strait of Hormuz, a key shipping route that carries about 15 million barrels of crude per day, nearly 30 percent of global seaborne oil trade.
“The most immediate and tangible development affecting oil markets is the effective halt of traffic through the Strait of Hormuz,” said Jorge Leon, senior vice president and head of geopolitical analysis at Rystad Energy.
“Unless de-escalation signals emerge swiftly, we expect a significant upward repricing of oil at the start of the week,” he added.
Leon said some supply could be rerouted through alternative pipelines, including Saudi Arabia’s East-West pipeline to the Red Sea, which has a capacity of about 5 million barrels per day, and the UAE’s Abu Dhabi pipeline, with a capacity of around 1.5 million barrels per day. Even so, he estimated the disruption could temporarily remove 8 million to 10 million barrels per day from global supply.
Barclays raised its Brent crude forecast to about $100 a barrel from $80 a day earlier, while analysts expect prices could jump by as much as $20 per barrel when trading resumes on March 2 if tensions escalate further, Reuters reported.
“Should the Strait remain effectively closed or energy infrastructure be confirmed as damaged, the upside risks to prices would increase further,” Leon said.
Even a short disruption in Hormuz traffic could lead to tanker delays, cargo rescheduling, and supply bottlenecks, keeping energy markets volatile in the near term.
