“Chance of the great system” of the USA with China

Bessent talked about the desired by USA changes during the appearance at the Institute of International Finance in Washington on your vision of the new economic order.

As he said China And their economy based on export production must change, otherwise the imbalance in the global economy will be deepened.

– The current economic model of China is based on export, which is a way to get out of economic problems. This is an unbalanced model that harms not only China, but also to the whole world. China must change. This country knows that. Everyone knows that (this country) must change, and we want to help him in this, because we also need to restore balance – he said.

Bessent later compared the current situation of China to the situation Japan from the early 90s, when after decades of growth based on exports, the country experienced two decades of stagnation and revived economically only after the reforms of Shinzo Abe.

As he said, Chinese decision -makers know that they have to change the country's economic model, but “sometimes you need an external impulse.”

As an alternative scenario, he presented an economic agreement between the US and China. – There is a chance for a great arrangement in which the US wants to balance the economy towards a larger production. This would mean less consumption. And if China seriously approaches the smaller dependence on the growth of export -based production and balance towards the national economy (…) – let's do it together – Bessent suggested.

The treasury secretary also said, among others In his opinion, the necessary changes in global institutions, including at the World Bank and the International Monetary Fund.

He criticized them for moving away from the original mission to reduce poverty in the world and grant loans to better developed countries that do not need them. He also called to finish the “absurd” classification of China as a developing and not developed economy.

Already after the speech, in the margins of the spring meetings of the International Monetary Fund and the World Bank, Bessent said that the current level of customs out of the US and China (145 percent for goods from China and 125 percent for goods from the US) is too high and in practice equals the embargo. He stipulated, however, that in order to start talks with Beijing, it is necessary to reduce duties.

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