Head of Beijing-backed lender warns of Asia pain from U.S.-China trade dispute
The Sino-U.S. trade dispute, if it persists, will hurt Asian countries that rely heavily on exports to China and affect their debt sustainability, the head of the Beijing-backed Asian Infrastructure Investment Bank (AIIB) warned on Thursday.
Some Asian economies that run trade surpluses against China could see their exports hit if the trade spat hurts growth of the world’s second-largest economy, said AIIB President Jin Liqun.
That will have a direct impact on the debt sustainability of these countries, which depend on export income to finance infrastructure projects and repay debt, he told a seminar in Washington.
“This is definitely going to be problem,” Jin said of the bitter bilateral trade tension. “We are looking forward to a solution … not partial but a complete solution.”
U.S. and Chinese trade negotiators are working on nailing down a Phase 1 trade deal text for their presidents to sign next month, spurring hope the two nations are de-escalating the spat that has roiled markets and hit global growth.
Jin is the founding president of the AIIB, which was set up to help meet Asia’s infrastructure needs and demonstrate that a China-led institution can meet international standards for best practice.
Jin said the AIIB was not undercutting other multilateral lenders, and instead focusing on supporting infrastructure investment rather than directly addressing poverty reduction – something the World Bank is already doing well.
“We can invest in high, middle-income countries. We don’t make poverty reduction as our central focus,” he said, adding that his bank hopes to help reduce poverty by promoting economic development via infrastructure lending.
Jin also said dealing with climate change is “considered a very important part of our mission.”
Source: Reuters (Reporting by Leika Kihara; Editing by Andrew Heavens and Andrea Ricci)