Meanwhile, Chinese officials with the Ministry of Commerce have welcomed reports that the U.S. Treasury Secretary Steven Mnuchin is considering making a trip to China to discuss economic and trade issues.
Unfair trade policies "impede stronger United States and global growth, acting as a persistent drag on the global economy", Mnuchin said.
"The intensifying challenges to multilateralism call for unequivocal and forceful voice of the IMF and the WTO (World Trade Organisation) in favour of rule-based worldwide trading system and against protectionism", he added. "We call on the International Monetary Fund and the World Bank Group to work together on a multi-pronged work programme to enhance debt transparency and sustainability and address LIDCs debt vulnerabilities", it said.
Patel is leading the Indian delegation to the Spring Meetings of the World Bank and the International Monetary Fund which bring together finance ministers and central bankers of member countries.
He also confirmed the USA now supports a US$13 billion (S$17 billion) capital increase for the World Bank in tandem with a set of reforms, including reducing lending to wealthier countries - a move widely seen as targeting China. "Equally, I think when you look at China's policy stands - also what the Europeans might do if there are any measures targeting China, I think we can expect to see retaliation, and that's where the trade war scenario really begins to potentially become a real one".
"The IMF must step up to the plate on this issue, providing a more robust voice and consistently noting when members maintain macroeconomic, foreign exchange, and trade policies that facilitate an unfair competitive advantage or lead to imbalanced growth", Secretary Mnuchin said.
A trade war and a new Cold War are threatening to rip apart the global economy. "We will work together to reduce excessive global imbalances in a way that supports global growth by pursuing appropriate and sustainable policies", the communique said.
International Monetary Fund says trade tensions hinder growth
Rising financial vulnerabilities, increasing trade and geopolitical tensions, and historically high global debt threaten global growth prospects, according to the communique.
The proposal was approved late Saturday by the World Bank's Development Committee, which sets policies for the 189-nation lending agency.
"We support further efforts to address the withdrawal of correspondent banking relationships and its adverse consequences, including on remittances, trade flows, and financial inclusion".
The ministers did express concern over the growth of "inward-looking policies", he said, using a frequent euphemism for trade protectionism.
Finance leaders repeatedly sounded warnings about a potential trade war.
"The world is too interconnected, so it will affect the global economy", Lagarde said at a news conference when asked about a potential trade war between the United States and China.
"Increasingly we find examples where by LICs [low-income states] have borrowed excessively, also unsustainably, out of huge, often non-transparent rising sovereign creditors like China and/or confidential creditors", the announcement claimed.
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