Beijing: European Central Bank (ECB) President Christine Lagarde delivered a speech in Beijing, emphasizing the urgent need for sustained global cooperation to address escalating trade tensions and prevent a damaging fragmentation of the international economic system.

According to Anadolu Agency, Lagarde spoke at a People's Bank of China (PBoC) event, stressing that one-sided approaches to resolving global frictions have consistently failed, often leading to unpredictable and costly outcomes. Referring to the tariff wars that triggered the Great Depression in 1929, she warned that coercive trade policies cannot offer a sustainable solution to current tensions. Lagarde suggested that concessions may be necessary from all parties to end the global trade war.

Lagarde also highlighted that interventions related to subsidies, which have disrupted global trade since 2014, have more than tripled. She pointed out that China, as the world's second-largest economy, is not alone in using subsidies; other countries, particularly in emerging markets, are also employing such measures.

She noted the dramatic changes in the global economy, including rising trade tensions and a geopolitically charged landscape that hinders international cooperation. Despite the reduced incentive to cooperate, Lagarde emphasized that the costs of failing to do so have increased significantly, raising the stakes for global economic stability.

During the event, a memorandum of understanding (MoU) was signed between the ECB and PBoC to enhance cooperation. Lagarde and PBoC President Pan Gongsheng signed the agreement, which updates a previous memorandum from 2008. This agreement establishes a framework for regular information exchange, dialogue, and technical collaboration between the two institutions.