China’s opposition to ending ‘non-market policies’ blocks G20 communiqué

The G20 finance ministers and central bank governors could not issue a joint communiqué after China rejected wording on “non-market policies” and other provisions it considered directed at Beijing.

Nineteen members agreed that action was needed to eliminate non-market policies and practices that worsen imbalances. China did not join that language, so the meeting in Asheville, North Carolina, ended with a chair’s statement instead.

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China, which has the world’s largest and unsustainable current-account surplus, was the only one that did not agree.

U.S. Treasury Secretary Scott Bessent said China was the only member that refused to agree. He criticized what he called the unsustainable scale of China’s current-account surplus and said an economy based on non-market principles could not continue flooding global markets with cheap exports. China recorded a record goods trade surplus of about $1.19 trillion last year.

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It is not sustainable for a non-market-based economy to endlessly pour cheap exports into the world.

The disputed term refers to government subsidies, policy financing and support for state-owned enterprises that can affect market prices and distort competition. The United States and Europe say such policies fuel Chinese overproduction and low-priced exports. China also opposed language urging countries with excessive and persistent external surpluses to remove distortions that restrict domestic consumption and make growth too dependent on exports.

Other disagreements involved keeping critical-mineral supply chains open, guaranteeing predictable navigation through the Strait of Hormuz and supporting the G20 Common Framework for restructuring developing countries’ debt. U.S. and European officials believed China was concerned that the navigation language could also apply to the Taiwan Strait and South China Sea. Bessent said his warning that tariff barriers could cause Chinese goods to pour into other markets had proved correct, and urged countries to consider how to protect jobs and manufacturing.

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Unfortunately, I was right.