Achievements make China a major power
“WHAT CHINA DOES IS IMPORTANT FOR THE WORLD, AND WHAT CHINA DOES, EVEN DOMESTICALLY, HAS IMPLICATIONS FOR THE WORLD.”
“CHINA HAS BEEN ATTEMPTING
TO PLAY A CONSTRUCTIVE
ROLE AS A
GLOBAL LEADER, ACCEPTING
SOME OF THE RESPONSIBILITIES.”
Eswar Prasad, the Tolani Senior Professor of Trade Policy at Cornell University and a senior fellow at the Brookings Institution. He was the former head of the IMF’s China Division.
Herman Van Rompuy has served as Belgian prime minister and president of the European Council. In both capacities, he received Xi Jinping during his visits to Belgium and the European Union headquarters in 2009 and 2014 respectively. Xi also met him either in Beijing or on other occasions before the veteran European politician stood down from his political career in late 2014.
Of those meetings, Van Rompuy says he is keen to highlight two speeches President Xi delivered in Europe.
The first one that impressed him was given by Xi at the College of Europe in the picturesque Belgian city of Brugge, where Van Rompuy is still teaching, when Xi wrapped up his first tour to West Europe as Chinese president in early 2014.
“In the speech, Xi explained China’s long history of civilization and the impressive achievements made by strategic partners China and the European Union,” Van Rompuy recalled in Brussels during a rare exclusive interview following his retirement.
Xi has proposed both sides forge a partnership from peace, reform, growth and civilization, which have already become guidelines of their bilateral relationship. In this sense, Van Rompuy said Xi’s speech is “political symbolic”. As politicians, he said “words are equally important as actions”.
During Xi’s visit to the European Union headquarters before giving the speech, both China and the bloc were planning to find synergies between the Belt and Road Initiative and European development programs. In late 2014, after Donald Tusk replaced Van Rompuy, both sides started to forge synergies between the initiative and multi-billion-euro European investment scheme.
“China is very good at longterm plans and we hope that this initiative can be very successful in developing the bilateral relations,” Van Rompuy said.
Xi’s speech advocating open economies and free trade and the fight against protectionism was the second one Van Rompuy wanted to highlight. “We were much impressed by President Xi’s speech in Davos, which showcased China’s engagement to an open economy in a globalized world,” said Van Rompuy.
Van Rompuy said the European Union shared with Xi’s advocacy, when the West was surrounded with terrorism, populism and isolationism.
In looking forward, Van Rompuy said China and the European Union are strategic partners, but it doesn’t mean that both sides cannot have differences at a time when both sides have their lots in common.
“In this pure relationship, we can explain to each other about the differences we have,” he said.
Van Rompuy said the European Union is the world’s biggest open economy and he is convinced that the union’s recent move to unify the investment screening system at the European level was not meant to target China. “Our position is that in order to keep this openness on the global scale, we need this level-playing field,” he said.
“Otherwise we will lose support for open trade and investment within the European Union and we need the support of our citizens. This is nothing to do with protectionism and we don’t target China.”
Van Rompuy said a stable European Union is in the interests of China.
He also recognized China’s efforts announced in its marketoriented reform package at the 3rd Plenum of the 18th Communist Party of China Central Committee and he expected China to further showcase its determination to deepen its reform efforts at the soon-to-come 19th National Congress of the CPC.
What do you feel has been China’s biggest achievement over the past five years? What’s the most notable change you’ve observed?
China’s policymakers have steered the economy through a series of difficult domestic and global challenges. They have kept the economy on a path of steady growth, pulling millions of people out of poverty, substantially improving the living standards of China’s citizens, and establishing China as a major economic power.
What three words would you use to describe China today?
An economic and military superpower, assertive, providing global leadership.
What’s the biggest challenge China faces, and how do you feel the country can go about overcoming this difficulty?
China needs to fix its financial system. This is crucial to improve allocation of resources to the most productive sectors of the economy, generate better employment growth, and reduce the risks to the economy from financial sector problems. Both the short-term goals of maintaining growth and longerterm goals of improving productivity and rebalancing the economy depend on the efficiency of the financial system.
What are your expectations for the upcoming 19th National Congress of the Communist Party of China? What are the key issues you care about most?
I hope that new members of the senior leadership team (the Politburo Standing Committee) as well as any new appointments at the major financial and regulatory agencies, are of people with an understanding of how important it is for China to make rapid progress on a broad range of macroeconomic and financial sector reforms.
After the Congress, I hope we will see a renewed effort to undertake a broad range of macroeconomic and structural reforms, including banking system reforms, corporatization of the State-owned enterprises, hukou (household registration) and land reforms, improvements to the fiscal revenue and expenditure systems, and a shift to a market-determined exchange rate.
How do you view China’s role in today’s world?
China has been attempting to play a constructive role as a global leader, accepting some of the responsibilities that come with that role.
With its economic might as the second-largest economy in the world, it has a key role to play in building up an international consensus on issues such as global governance, free trade, tackling climate change, and women’s rights. The renminbi’s increasing prominence as an international currency also means that China will start playing a bigger role over time in global financial markets.
Do you believe that some of China’s experiences or practices could be used to solve pressing global problems? If so, what are they?
China has been very successful at experimenting with small-scale reforms before scaling them up. This is an approach that could be used to deal with a broad range of reforms, both at the country and global levels. China has also been effective at deploying state resources to improve the education system and the skills of its workforce.
While China itself still faces many challenges in these areas, its emphasis on education, rural development, and environmental consciousness are all relevant for other countries as well.
What’s the most unforgettable experience or moment you’ve ever had in China, or related to China?
My first time in each of the major cities in China such as Beijing, Shanghai, Dalian, Tianjin has impressed me with the quality of physical infrastructure. As an Indian, I wish Indian cities had equally impressive infrastructure to boast of!
In my meetings and various interactions with Chinese leaders and policymakers, I have been impressed by their willingness to listen to advice from a broad range of domestic and international experts, and their eagerness to learn from the positive and negative experiences of other countries with various policies.