Growing trade imbalances demand course correction

FRANCE'S PRESIDENT EMMANUEL

- N CHANDRA MOHAN

Macron rightly underscored the danger of growing imbalances which threaten the global rules-based trading order during his fourth visit to China earlier this month and also in the Financial Times.Despite all the bonhomie of a state visit, his comments highlighted the escalating tensions between Europe and China over the dragon’s burgeoning trade and investment imbalances. China’s trade surplus with the rest of the world has in fact hit a historic $1 trillion-plus this year till November. In sharp contrast, the world's most powerful economy, the US’s trade deficit with the rest of the world registered an equally historic $1.2 trillion last year. Macron’s discomfiture is that Europe—as indeed the rest of the world—suffers collateral damage in the hegemonic struggle for dominance between Washington and Beijing that is fragmenting the global economy broadly into US-centric and China-centric blocs.