The heads of the World Bank and IMF today urged the US and China to follow world trade rules and de-escalate a dispute over Beijing’s technology development strategy that threatens to do lasting damage to the global economy.

Christine Lagarde, Managing Director of the International Monetary Fund, advised Beijing and Washington to cool down and fix aspects of the world trading system that needs fixing and not to break it.

Lagarde and World Bank President Jim Yong Kim spoke separately on the sidelines of the lenders’ annual meeting in a resort zone of the tropical Indonesian island of Bali.

The event brings together finance ministers and central bankers from many economies. Earlier in the week, the IMF downgraded its global economic outlook, forecasting growth will be 3.7 per cent this year rather than its earlier estimate for 3.9 per cent growth.