Chinese President Xi warns of backlash against globalisation
CHINESE President Xi Jinping has warned that a rising tide of protectionism and anti-globalisation was endangering the world economy’s still-fragile recovery as BRICS leaders vowed to forge closer business and trade ties.
At a summit in the Indian tourist hub of Goa on October 16, host Prime Minister Narendra Modi and the leaders of China, Russia, Brazil and South Africa issued a joint declaration on a range of measures, including the setting-up of a new credit ratings agency and fighting tax evasion.
BRICS was formed in 2011 with the aim of using members’ growing economic and political influence to challenge Western hegemony.
The nations, with a joint estimated GDP of US$16 trillion, set up their own bank in parallel to the Washington-based International Monetary Fund and World Bank and hold summits rivalling the G7 forum.
But the countries, accounting for 53 percent of world population, have been hit by falling global demand and lower commodity prices, while several have also been mired in corruption scandals.
Russia and Brazil have fallen into recession recently, South Africa only just managed to avoid the same fate last month and China’s economy has slowed sharply.
Both Mr Xi and Mr Modi said the group must stick together, insisting there was much to remain positive about even though its members have been beset by domestic woes and problems sparked by the 2008 financial crisis.
“At present the deep-seated impact of the financial crisis is still unfolding. The global economy is still going through a treacherous recovery and deep adjustments,” Mr Xi said.
The Chinese president said “deep-seated imbalances that triggered the financial crisis” were far from being resolved.
“Some countries are getting more inward-looking in their policies. Protectionism is rising and forces against globalisation are posing an emerging risk,” he added.
While Mr Xi did not single anyone out, Republican candidate Donald Trump has threatened to erect trade barriers to Chinese products if elected US president. Britain’s vote to leave the European Union has been interpreted partly as a backlash against globalisation.
While China’s economy has been running out of steam of late – although it is still the world’s secondlargest – India is now the fastestgrowing major economy and its GDP is expected to increase 7.6pc in 2016-17.
Mr Modi said it was vital the BRICS nations increased cooperation by dismantling trade barriers and developing infrastructure.
Mr Xi said BRICS countries had much to be proud of and had contributed to more than 50 percent of global growth in the past decade.
Russian President Vladimir Putin meanwhile called for closer cooperation in areas such as e-commerce and space exploration.
Mr Modi confirmed that the leaders had agreed to fast-track setting up a new ratings agency amid accusations from within the bloc that the three traditional agencies – Moody’s, Standard & Poor’s and Fitch Ratings – are all Western-based.
“We look forward to translating into reality the idea of a BRICS Credit Rating Agency,” he said, without giving details of the muchtrailed agency or timeline for its establishment. –
Indian Prime Minister Narendra Modi (right) shakes hands with Chinese President Xi Jinping at the BRICS Summit in Goa on October 16.