China backs closer IMF monitoring of fiscal and spillover risks
Amid volatility in global bond markets, China is calling for tighter international scrutiny of fiscal vulnerabilities in major advanced economies. The stance, outlined by central bank governor Pan Gongsheng at IMF and World Bank meetings in Bangkok, also links global imbalances to financial factors such as cross-border capital flows.
Highlights
- People's Bank of China Governor Pan Gongsheng says Beijing supports IMF moves to strengthen surveillance of fiscal risks in advanced economies and related global spillover effects.
- Pan urges the IMF to increase focus on global imbalances and emphasize financial factors, including capital flows, in its analysis during the Bangkok meetings.
- China’s comments come amid global bond market selloffs driven by higher borrowing costs, large fiscal deficits in major economies, and AI-driven capital expenditure.
Beijing's position at IMF meetings
As reported by Reuters, People's Bank of China Governor Pan Gongsheng says Beijing supports the International Monetary Fund in strengthening surveillance of fiscal risks in major advanced economies and of the spillover effects those risks can have on the broader global economy.Pan makes the remarks at the International Monetary and Financial Committee meeting during the annual gatherings of the IMF and World Bank in Bangkok. A statement from the central bank shows he also urges the IMF to analyse global imbalances and place greater emphasis on the role of financial factors, including capital flows, in shaping those imbalances.
The central bank chief also says China supports the multilateral trading system and opposes all forms of protectionist measures.
Market strain and broader policy debate
The comments come as rising borrowing costs, persistently high fiscal deficits in major economies and volatile investor sentiment contribute to a broad global bond market selloff. The article also notes that heavy capital expenditure tied to artificial intelligence is aggravating market turbulence.China's intervention at the meetings adds to a wider policy debate over the balance of risks in the world economy, including the interaction between fiscal policy, cross-border financial flows and trade tensions. Earlier this week, IMF Managing Director Kristalina Georgieva says China must shift from export-led growth toward stronger domestic consumption.
In our earlier article on mounting sovereign borrowing risks amid geopolitical shocks, we examined how elevated public spending and higher interest rates are straining government finances and increasing refinancing pressure. We noted that emerging and frontier markets are especially exposed because debt-service costs are high relative to narrower revenue bases, while persistent disruptions can also worsen inflation and weaken sovereign credit outlooks.
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