US, China urged to be ‘responsible’ global economic leaders in wake of Fed rate hike
- US Federal Reserve confirmed a widely expected second straight 75 basis point rate increase, lifting its benchmark to a range of 2.25 per cent to 2.5 per cent
- On Thursday, China’s Politburo refrained from strong stimulus, instead pledging to use proactive fiscal policy to drive up economic growth
A telegraphed fourth interest rate increase this year by the United States created few shock waves in China, but the world’s two largest economies have been urged to work together to tackle global economic and financial turbulence.
“China-US macroeconomic coordination should be a more important topic than tariff rollback, considering the looming recession threat,” said Chen Fengying, a senior fellow with the China Institutes of Contemporary International Relations, referring to discussions within the Biden administration over removing Trump-era trade tariffs on imported Chinese goods.
Such bilateral coordination could be more efficient as the two countries account for around 40 per cent of the global gross domestic product (GDP), she added.
A Beijing-based diplomat from an Asian nation, who asked not to be identified, also said it was time for the US and China to cooperate to counter global recession risks as “responsible” global economic leaders despite their overall bilateral tensions.