A call for gen­eros­ity, uni­ver­sal values

China Daily European Weekly - - LASTWORD -

China’s ini­tia­tives must be more than util­i­tar­ian, Swiss aca­demic says

South Co­op­er­a­tion Fund to im­prove eco­nomic growth and stan­dards of liv­ing in devel­op­ing coun­tries.

“China is al­ready gen­er­ous, but go­ing for­ward, it is im­por­tant that China’s in­ter­na­tional aid should not be seen as a way for China to ex­port its over­ca­pac­ity, be­cause oth­er­wise that gen­eros­ity still has a do­mes­tic fo­cus and will not be per­ceived as sin­cere,” Casas says.

China’s fur­ther open­ing up of its own do­mes­tic mar­ket for other economies will be key to build­ing the mo­men­tum of mul­ti­lat­eral col­lab­o­ra­tion and demon­strat­ing gen­eros­ity be­fit­ting a global leader, he says.

“Much of the fu­ture of hu­man­ity de­pends on what po­si­tion China takes. If China closes up, it will be one type of world. If China opens up, it will be a very dif­fer­ent type of world,” he adds.

In his view, mul­ti­lat­eral col­lab­o­ra­tion is key to “in­creas­ing mu­tual de­pen­dency on the global econ­omy, hence in­creas­ing the cost of con­flict in other ar­eas”.

Dur­ing the past year, the push for glob­al­iza­tion has seen set­backs, in­clud­ing Bri­tain’s choos­ing to leave the Euro­pean Union and the United States’ with­drawal from the TransPa­cific Part­ner­ship Agree­ment. In ad­di­tion, the US has agreed to rene­go­ti­ate the North Amer­i­can Free Trade Agree­ment with Canada and Mex­ico.

Casas says that, even if the US stays with NAFTA, it is un­likely to push for­ward in­ter­na­tional mul­ti­lat­eral col­lab­o­ra­tion. Within this con­text, new mul­ti­lat­eral or­ga­ni­za­tions such as the AIIB “will pro­vide fresh im­pe­tus for global ar­range­ments con­ducive to free trade and in­creased cross-bor­der in­vest­ment”.

The AIIB, es­tab­lished lit­tle more than a year ago with 57 found­ing mem­bers, has al­ready ap­proved a lend­ing pro­gram of $1.73 bil­lion and in­vested in nine projects across Europe, Asia and theMid­dle East.

Casas says such ini­tia­tives “re­flect a long-term com­mit­ment and pro­vide new ideas and re­sources”, and of­fer more rep­re­sen­ta­tion to emerg­ing economies than such in­sti­tu­tions such as the World Bank and the In­ter­na­tion­alMone­tary Fund.

Mean­while, he says, newly emerg­ing economies are bet­ter rep­re­sented in newer in­sti­tu­tions such as the AIIB and the New De­vel­op­ment Bank, which was es­tab­lished by Brazil, Rus­sia, In­dia, China and South Africa, col­lec­tively known as the BRICS coun­tries.

For in­stance, the New De­vel­op­ment Bank’s method of fund­ing in lo­cal cur­ren­cies is cited by Casas as an ex­am­ple of fresh in­sti­tu­tions’ in­no­va­tion. Although lo­cal cur­rency loans in­crease the risk for lenders, there are ben­e­fits for the bor­row­ing coun­tries; hence the sys­tem more ef­fi­ciently achieves its ul­ti­mate pur­pose, he says.

Casas adds that China’s new lead­er­ship role in mul­ti­lat­eral de­vel­op­ment also helps the coun­try re­solve two im­por­tant chal­lenges of its own: the mid­dle-in­come trap, in which de­vel­op­ment stag­nates af­ter a coun­try reaches mid­dle-in­come lev­els, and the Thucy­dides trap, which sees con­flict as likely be­tween a ris­ing power and a dom­i­nant one.

Casas says open­ing its do­mes­tic mar­ket al­lows China to ex­pe­ri­ence more do­mes­tic com­pe­ti­tion — which leads to a struc­tural shift of do­mes­tic pro­duc­tiv­ity to­ward ad­vanced man­u­fac­tur­ing — while es­tab­lish­ing in­ter­na­tional part­ners sup­ports its in­ter­na­tional author­ity.

“China needs to en­ter ad­vancede­con­omy ter­ri­tory, and in do­ing so, it needs to be a strong part­ner of ex­ist­ing pow­ers. The only way to do so is with an en­light­ened, gen­er­ous nar­ra­tive em­body­ing a set of uni­ver­sal values that other na­tions will wish to share.”

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