U.S.-China rivalry risks splintering global economy, IMF chief warns

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PHNOM PENH, Cambodia — The global economy is splitting into rival blocs, threatening a Cold War rerun that would leave almost everyone worse off, the head of the International Monetary Fund said on Saturday.

U.S. and European efforts to redraw global supply chains make sense if they help eliminate the kind of reliance on a single supplier that proved so disruptive during the pandemic, according to Kristalina Georgieva, the fund’s managing director. But if the two powers erect new trade barriers to gain an edge in their geopolitical contest, they could set off a destructive cycle that would hurt middle-class and poor households while leaving the wealthy unscathed.

“My concern is a deepening fragmentation in the world economy,” Georgieva said in an interview with The Washington Post. “We may be sleepwalking into a world that is poorer and less secure as a result.”

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