WASHINGTON, April 20 (Xinhua) -- Rising trade tensions pose downside risks to the open Asian economies, International Monetary Fund (IMF) officials warned on Friday.
"More inward-looking policies, as highlighted by recent tariff actions and announcements, would certainly affect an open region like Asia," said Changyong Rhee, director of the IMF's Asia and Pacific Department, at a press briefing.
According to IMF's latest forecast, the Asian region is projected to grow 5.6 percent in 2018 and 2019, 0.1 percentage point higher than its forecast in October.
"The region remains the main engine of the global economy, accounting for more than 60 percent of global growth," said Rhee.
However, the region is facing downside risks over the medium term, including a tightening of global financial conditions, a shift toward inward-looking policies, and an increase in geopolitical tensions, said Rhee.
"Trade tensions need to be resolved through multilateralism, rule-based system that we already have," said Rhee, adding that "there will be no winners in this so-called trade war."
In order to ease trade tensions, Rhee suggested Asian economies protect multilateralism through proactive actions, such as promoting domestic demand, adopting a more flexible exchange rate system, and further opening up service sectors.
Asian economies have benefited a lot from the global trading system, and in some senses, they have also contributed to protecting and upgrading the current multilateral trading system, said Rhee.
At the same press briefing, Markus Rodlauer, deputy director of the Asia and Pacific Department, also warned of the negative impact of trade tensions on global supply chains and called for multilateralism in solving trade tensions.
Rodlauer said that both manufacturing countries and consumption countries have benefited a lot from the current efficient supply chains.
"An open multilateral trading system based on strong institution is very important, and we support that," said Rodlauer.
In regard to China's economy, Rodlauer said that the near term outlook for China is very benign and positive. Factors, such as productivity gains and continuous rebalancing, would support the country's medium-term outlook, he said.
