Momentum of transformation must be maintained
Jean-Claude Trichet, former president of the European Central Bank, has been working with China for many years. He started discussing foreign direct investment with Chinese negotiators, on behalf of the French government, nearly four decades ago, when China was in the nascent stages of shifting from a planned economy to its current policy of reform and opening-up.
Trichet, who has advised “many French prime ministers”, said China’s huge transformation was a dream that could not be realized in a single generation. “But I am a witness of China’s rapid progress,” Trichet said in Paris.
“After all, in a generation, the changes are so incredible. How can the Chinese people have achieved it in the time? It’s fascinating.”
Trichet said President Xi Jinping is “quite remarkable”, considering the progress China has made between 2012 and 2017 under his leadership.
As an economist, Trichet is impressed by Xi’s efforts to deepen structural reform by transforming heavy industry and bringing the country into the medium and high ends of the global production chain.
“Internationally, as a leader of global governance reform, China is productive, assertive and influential,” Trichet said.
Before stepping down as president of the ECB in 2011, Trichet worked with officials at the People’s Bank of China, the central bank, to involve China in an aid package to help solve the European debt crisis as well as boost internationalization of the renminbi.
Trichet said internationalization of the renminbi is on a fast track, and its inclusion in the International Monetary Fund’s special drawing rights basket means symbolically it is no different from the dollar, euro, pound and yen as a global currency.
At the same time, he said China’s “immense” Belt and Road Initiative is aligning with the multibillion-euro European Investment Plan, which will be of great importance in deepening cooperation between China and the European Union.
Trichet said the Bruegel, a Brussels think tank of which he is chairman, is already working with British think tank Chatham House as well as its Chinese partners, Beijingbased China Center for International Economic Exchanges and the Chinese University of Hong Kong. It submits recommendations for both governments and the private sector to deepen cooperation under the framework of the Belt and Road Initiative and the European Commission’s expansive investment plan.
He also praised Xi for his successful chairing of the G20 Summit in Hangzhou, Zhejiang province, in September last year, mainly because the Chinese president emphasized how technology and innovation can play a bigger role in transforming the global economy.
“Xi, for me, has been quite remarkable because the Hangzhou G20 meeting was the one where the stress was put on technology,” he said. “A lot of work has been done in the information technology, artificial intelligence and internet of things sectors.”
Trichet said observing China’s role in ushering in a revolution in global governance in previous years was “particularly fascinating”.
When talking about his expectations for the 19th National Congress of the Communist Party of China, he said he had high hopes for the new CPC Central Committee, which will be formed at the congress. “This is important because everything depends on men and women, and, for every country in the world, capable leadership is essential,” Trichet said.
He said the challenge China is facing is how to carry on the momentum of the past five years in terms of structural reforms and economic modernization. He also considers improving corporate governance of State-owned enterprises to be important.
Trichet warned that China’s leadership should be cautious about debt levels and demographic challenges, which will require balanced development to cope with social and economic impacts.
“Of course, the opportunities are immense as well for China in the coming five years,” he said.
Jean-Claude Trichet, former president of the European Central Bank