PBOC governor calls for joint efforts by deficit, surplus countries on global imbalances

Countries running deficits and surpluses should work together to achieve a dynamic balance in the global economy, China's central bank governor Pan Gongsheng said on Thursday, according to a statement on the central bank's website.

Global imbalances cannot be resolved through exchange rate adjustments, Pan said at the G20 Finance Ministers and Central Bank Governors meeting in Bangkok, Thailand.

Exchange rate dynamics are driven by factors including economic growth, monetary policy, financial markets, geopolitics and sudden shocks, with no straightforward relationship between exchange rates and current account balances, he said.

Pan called for a more comprehensive perspective on global imbalances, looking beyond the current account to financial channels, particularly the role of capital flows as global financial integration deepens.

Intensifying geopolitical conflicts remain the most significant uncertainty for the global economy, he said. Government bond market volatility in some countries and risks of a correction in AI-related asset valuations have exacerbated financial vulnerabilities.

Modernizing financial regulation does not mean easing regulation, Pan said, calling for stronger macroeconomic policy coordination through the G20 Finance Track.

China's economic development remains well on track, and the PBOC will continue to implement an appropriately accommodative monetary policy to support steady economic growth and smooth financial market operations, Pan added.