The Chinese central bank has huge room for maneuver with its policy instruments as the trade struggle between China and the United States continues to escalate. Yi Gang, the governor of the People’s Bank of China, said this in an interview with news agency Bloomberg.
“We have more than enough scope with interest rates, with the capital requirements for banks and for fiscal and monetary instruments. I think the room for adjustments is huge,” Yi said in the interview.
Recently, there have been signs that the trade struggle has undermined the Chinese economy.
The central bank president will meet with the American finance minister Steven Mnuchin at a G20 summit in Japan this weekend. Trade negotiations between China and the US have stopped for some time. Yi thinks there will be productive talks with the Americans, but said that trade war negotiations will be “uncertain and difficult.”