“Just blaming economic globalization for the world’s problems is inconsistent with reality, and it will not help in solving the problems … We should adapt to and guide economic globalization, cushion its negative impact, and deliver its benefits to all countries and nations.”
So said Chinese President Xi Jinping in his much-discussed speech at the World Economic Forum in Davos on 17 January 17, presenting China’s proposal for global economic governance and great power responsibility.
In the nearly 80 years since World War II, natural resources, financial capital, advanced technologies, and professional talent have globalized, flowing rapidly across the world and stimulating rapid and constant economic growth. The invention of the Internet has reinforced globalization, facilitating new interconnections within the global economy.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
However, after the international financial crisis of 2008, the world has been confronted with an alternative: “deglobalization.” Brexit is the harbinger of this new challenge. For some developed countries, the reversal of globalization can temporarily provide local economic benefits, which makes deglobalization’s popularity following the recent economic turmoil understandable. However, in the longer term, globalization is essential for achieving a healthy, stable, and sustainable world economy that improves people’s lives and furthers civilization. Globalization is the necessary choice for responsible nations.
A series of important statements made by Xi in recent years articulate China’s position: it will promote and guide economic globalization by working to build a “community of human destiny.” China’s proposition is to “Unswervingly committing ourselves to guide the economic globalization process, unswervingly committing ourselves to promote Asia-Pacific open economies, unswervingly committing ourselves to de-bottleneck regional interconnection and unswervingly committing ourselves to create new reform and innovation patterns.” This is the way to continue reaping the benefits of globalization despite contemporary challenges.
Further economic globalization can be achieved through the following steps.
First, firmly promote fair development. It is necessary to improve the position of developing countries, including China, in the current global governance structure. Though share reform of International Monetary Fund (IMF) has increased the voices of developing countries such as China and India, their current share is still insufficient in comparison with the economic volume and population size of these countries. To further improve their positions in the world economic system, developing countries should not blindly follow the financial and economic policies of the developed countries, but build a diversified global multilateral mechanism that strives for self-development. On the other hand, developed countries should encourage the further growth of developing countries, and adopt reasonable proposals and suggestions to positively cooperate with these nations in global economic affairs.
Second, continue and deepen global cooperation. We should adhere to a policy of openness, consolidating and expanding global cooperation based on free trade zones. On the basis of maintaining the WTO principles of nondiscrimination, fair trade, and transparency, we should adopt different mechanisms to promote the construction of free trade zones in different countries and economies, so as to realize large-scale, multi-level, and in-depth comprehensive cooperation. Potential examples include a China-India free trade zone and China-Japan-Korea free trade zone.
Third, carefully study the process of economic globalization. We should give full play to the roles of diversified platforms, including enterprises, social organizations, and think tanks, to enrich and realize multi-path exchanges, so as to ensure the stable progress of economic globalization.
Fourth, focus on guiding public awareness. We should hold discussions related to economic globalization and livelihood issues in public settings and via diversified new media platforms, so as to make people all over the world realize the significance of globalization, and mobilize more and more people to join in the process of globalization.
Though the international economy remains unstable, the trend of economic globalization is irresistible. China, as the world’s second largest economy, is becoming more and more important in terms of its role and responsibility in economic globalization and global governance, another irresistible trend. China will definitely provide new ideas for the further development and progress of human society.
Yi Peng is the president of the Pangoal Institution, a leading China-based public policy think tank.