Building of the People's Bank of China (File photo: VCG)
BEIJING, May 19 (Xinhua) -- China's central bank has warned in a report that uncertainties brought by trade frictions between China and the United States could have an adverse impact on the global economy.
Trade frictions and policy uncertainties are prominent risks facing the world economy, while the combination of multiple uncertainties will amplify the vulnerabilities of economies, the People's Bank of China (PBOC) said in a report on the implementation of monetary policies in the first quarter (Q1).
It said the uncertainties and the impact on global supply chains caused by trade frictions had gradually unleashed, ranging from postponed enterprise investment decisions to easing external demand for some countries due to disrupted supply chains.
In the future, trade frictions and policy uncertainties could further drag down the global economy through high inflation, damage to sentiment of families and enterprises, and volatility of the financial market, the PBOC report said.
Despite external uncertainties, the PBOC forecast China's economic outlook would maintain stable thanks to many advantageous factors.
"China is capable of addressing different kinds of internal and external uncertainties as there is sufficient room for policymakers to maneuver as well as various monetary policy tools," the central bank said.
The country's economic indicators showed positive signs of stabilization in Q1, with the economy posting better-than-expected growth of 6.4 percent year on year, reflecting expansionary economic activity and improving economic structure.