PBOC'S PAN said escalating geopolitical conflict remains the largest uncertainty
for the global economy. Large swings in some sovereign bond markets and rising
risk of valuation corrections in AI-related assets have heightened financial
fragility. Modernizing financial regulation is not loosening policy and should
not weaken financial stability or resilience. He urged full use of the G20
finance platform to strengthen macro policy coordination and jointly address
global risks. On global imbalances, Pan said analysis must go beyond current
accounts to include financial channels—particularly capital flows as global
financial integration deepens. Global imbalances cannot rely on exchange-rate
adjustment alone; exchange rates are driven by growth, monetary policy,
financial markets, geopolitical events and shocks and do not have a simple
linear relation with current accounts. Surplus and deficit countries should
cooperate to restore dynamic balance.
