WSJ - Top IMF Official Urges China to Heed Complaints on Unfair Trade

The Wall Street Journal runs this article quoting IMF official David Lipton as saying the some of the US complaints on unfair trade are legitimate and should be listened to.  While he suggests the US would be better served by handling their complaints in a less confrontational way, it is interesting that he points out at Davos that blindly dismissing the US view on this will "make it really hard to have a globalization that's durable."

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"A top International Monetary Fund official said some Trump administration complaints about unfair trade are valid, as he urged the rest of the world, in particular China, to take note.

David Lipton, the number two official at the IMF, said while there’s nothing inherently wrong with bilateral trade deficits, “unwarranted” deficits driven by “distortive” or “unfair” trade practices are a problem.

“The U.S. is making the complaint that there are such undesirable policies. As a complaint that deserves to be heard.” He noted that in both the U.S. and Europe, unhappiness with globalization has generated political upheaval. “The rest of the world, whose future really depends on openness and integration, had better be open to dealing with those concerns and complaints or else it will be really hard to have a globalization that’s durable.”

President Donald Trump’s confrontational approach to trade . . . . .   click here to read the full article in the WSJ
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My added comments: This comment by an official like David Lipton at the IMF will not go unnoticed. Even non financial analysts like Brit Hume were pointing it out on Twitter.

David Lipton (IMF) - The Challenges to Sustaining the Global Recovery

In this recent speech, IMF Deputy Managing Director David Lipton talks about a variety of issues that will impact the financial landscape in the future. Below is an excerpt from this speech in regards to how Fintech may impact things.

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. . . . 

Digital Finance

"All of which leads us directly to the third area of change: the broader universe of digital finance, which you will be discussing this afternoon. This is playing out right now before our eyes in the online payments platforms like PayPal and China’s Ali-Pay. In only a few years, many people in China’s cities have stopped using cash altogether. In East Africa, the online banking pioneered by M-Pesa has benefited millions of people who previously lived outside the financial system.

These success stories show how Fintech can be a force for inclusion and development.

But Fintech also presents a serious challenge to traditional banking models. And as online platforms develop lending and investment products, effectively acting like banks, every regulator and supervisor must be concerned with whether the current regulatory framework is adequately encompassing these businesses. Here, too, work is underway, with Fintech firms interacting with regulatory authorities on a range of possible solutions.

But we are still talking about a business that fits broadly within our frame of reference for financial services. A case can be made that next level of this digital transformation—the emergence of crypto-currencies, and new transaction and settlement technologies—is moving well beyond familiar boundaries.

The so-called distributed ledger technology is dispensing with the backroom and moving to instantaneous transactions outside the reach of governments—and that includes the scope of monetary policy. We now see central bankers starting to talk about issuing their own virtual currencies and considering ways of regulating the bitcoins and others.

Here, too, the implications are enormous. National regulators and international standard-setters need to move quickly to define a regulatory setting that can address the issues that will emerge almost before we know it. At the same time, we cannot “throw out the baby with the bathwater” by imposing a regime that stifles innovation.

The Fund has just begun to address these issues within its mandate. Like cyber-threats, there is a great deal of work to do to understand the potential macroeconomic impact."

Please click here to read the full text of the speech by David Lipton

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Added note: The speech also mentions how debt continues to grow globally. This article in Reuters points out the problem with some big numbers.