China economy

IMF says China should ‘look at its own barriers’ to trade if it truly wants globalisation

Beijing should protect intellectual property rights, stop favouring state-owned enterprises, IMF executive David Lipton says

PUBLISHED : Monday, 15 January, 2018, 12:30pm
UPDATED : Monday, 15 January, 2018, 11:28pm

China should take a good look the restrictions it places on trade and investment if it wants to promote globalisation, a senior executive with the International Monetary Fund said in Hong Kong on Monday.

The comments by David Lipton, the IMF’s first deputy managing director, come as Beijing tries to paint itself as the victim of the protectionist measures against its products and investment deals, most notably by the United States.

“China should be able to look at its own restrictions on trade and investment, which have generated criticism from some trading partners,” Lipton told the Asian Financial Forum.

“It also means protecting intellectual property rights and reducing distortions of industrial policy over capacity and policies that favour [state-owned enterprises].”

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Lipton was referring to common complaints about Chinese trade and investment practices, including its lack of reciprocity. US President Donald Trump is expected to take a tougher stand on trade with Beijing this year after China’s surplus with the US rose to a record high in 2017.

Trump was briefed on the issue over the weekend by trade envoy Robert Lighthizer, as his administration considers whether to impose broad restrictions on steel and aluminium imports from China. The findings of Washington’s investigation into alleged intellectual property theft and cyber espionage will ­be delivered on Thursday.

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The Committee on Foreign Investment in the United States this month rejected a bid by Ant Financial, Alibaba Group’s financial arm, to buy US-based MoneyGram International over national security concerns. Alibaba owns the South China Morning Post.

Meanwhile, China is imposing new restrictions of its own on foreign businesses. Tech giant Apple announced just a few days ago that it would hand over its iCloud operations in China to a government-controlled big data firm to comply with new regulations from Beijing.

Lipton did not mention any specific deals in his speech.

“Globalisation will not receive sustainable support unless it is based on free and fair trade and investment [practices],” he said. “Better globalisation is in China’s interest.”