International Monetary Fund chief Christine Lagarde on Thursday said that the global economy is threatened by trade tensions between the United States and China.
“A slowdown of China is fine. It’s legitimate. But if the slowdown was fast, it would constitute a real issue,” she said at the World Economic Forum in Davos.
Her comment comes amid trade tensions between the U.S. and China that have seen the two countries exchange tariffs on billions of dollars worth of each other’s goods.
{mosads}President Trump has also threatened to raise tariffs on $250 billion in Chinese goods from 10 percent to 25 percent if trade negotiations between the two sides fail.
Amid the trade dispute, China has experienced its slowest economic growth in decades in 2018, according to media reports.
Lagarde on Thursday also called on countries not to rely heavily on central banks to resist an economic decline, according to Reuters.
“It would be very nice if the economies at large didn’t have to rely on central banks yet again in order to resist the next shock,” Lagarde said. “Policymakers have to really take the right course of action when it comes to fiscal policies, when it comes to completing the reforms.”