(Yicai) March 27 -- Macroeconomic policy coordination has become more challenging with globalization deepening, but there is still a strong need for international collaboration in climate change, payment systems, debt issues, and global imbalances, according to the former governor of China's central bank.

Regional conflicts are frequent, tensions among major nations are escalating, and countries are paying more attention to domestic interests rather than international coordination, Zhou, who is also the former vice chairman of the Boao Forum for Asia, said at the forum on March 24. "Coordination is an important issue, but has become more challenging than before."

Although the United States has withdrawn from the Paris Agreement, a legally binding international treaty on climate change, most countries in Europe and Asia, including Japan, South Korea, and members of the Association of Southeast Asian Nations, continue to actively promote regional emission reduction alliances, he pointed out.

Regarding payment systems, cross-border payments and digital currencies are financial infrastructure and should not rely solely on commercial banks or private platforms, Zhou noted. ASEAN countries such as Singapore have made significant progress in cross-border payments, with tourists' consumption, online merchants, small-to-medium trade settlements, and other scenarios expected to benefit from the system for seamless connectivity, he added.

For debt issues, some developing countries still face heavy pressure after the Covid-19 pandemic, Zhou said, adding that although the G20's Debt Service Suspension Initiative introduced in 2020 and the ensuing government debt restructuring framework have partially addressed the problem, it has not been fundamentally resolved.

"The US is also in a situation of global imbalance, but has decided to use tax measures instead of the exchange rate mechanism or similar measures to address that," Zhou said. "However, taxation is a thorny issue, so we should use the International Monetary Fund's framework measures to resolve the imbalance problem."

Zhou also explained why Asian economies have a preference for exchange rate stability during the Boao Forum for Asia's dialogue session. On the one hand, this stems from the historical inertia of the planned economy, with a tendency to measure exchange rate rationality based on purchasing power parity, and on the other hand, significant exchange rate fluctuations often trigger unexpected capital flows, amplifying economic imbalances and putting greater pressure on policymakers, he pointed out.

Editor: Martin Kadiev