Former PBoC Governor Zhou Calls for Global Monetary Policy Coordination to Prevent Economic Risks

Zhou Xiaochuan, the former Governor of the People's Bank of China, addressed the 2025 Lujiazui Forum, highlighting the critical need for global monetary policy coordination. He emphasized that the absence of a unified global monetary strategy poses significant risks to international financial stability. Zhou identified the "three-no" state—no institution, no tool, and no consensus—as key shortcomings in the current global monetary systems. This lack of coordination could lead to unpredictable economic impacts, particularly in emerging markets dealing with policy spillovers.

Zhou's remarks underscore the interconnectedness of national economies and the necessity for a cohesive approach among major economies. He noted that major reserve currency countries, such as the U.S. and China, must consider the global impacts of their monetary policies. Without a central body to guide these efforts, achieving coordination remains a challenge. The lack of international coordination could exacerbate economic vulnerabilities, particularly in regions facing trade tensions and economic uncertainties.

Despite the warnings, there have been no immediate market reactions to Zhou's speech. The market remains steady, with no significant shifts in traditional financial assets following the forum. However, the absence of a coordinated global monetary policy framework is a pressing issue that requires immediate attention. As trade tensions and economic uncertainties continue to impact the global economy, it is crucial for policymakers to work together to address these challenges. The coordinated development of international financial hubs, such as Shanghai, is a step in the right direction, but more needs to be done to ensure economic stability and growth.

Zhou's call for a unified global monetary strategy comes at a time when the world is grappling with significant macroeconomic issues. The absence of coordinated monetary policy was also a topic of discussion at the People's Bank of China, where Christine Lagarde warned that coercive trade policies pose a risk to global supply chains and the overall economy. Lagarde's comments underscore the growing concerns about the impact of trade disputes on economic stability. The central bank is set to conduct another interim assessment at its June 2026 monetary policy meeting, which will be crucial in addressing the ongoing economic challenges and formulating appropriate policy responses.

The National Bureau of Statistics has stated that China's economy remains steady despite encountering numerous unstable and uncertain factors. The NBS emphasized the need for coordination in domestic economic work to navigate these challenges effectively. This coordination is essential for maintaining economic stability and fostering growth in the face of global uncertainties. The coordinated development of international financial hubs, such as Shanghai, is also a priority, as evidenced by the action plan signed aimed at promoting their growth.