Chi­nese Pres­i­dent Xi warns of back­lash against glob­al­i­sa­tion

The Myanmar Times - - Business -

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. –

Photo: AFP

In­dian Prime Min­is­ter Naren­dra Modi (right) shakes hands with Chi­nese Pres­i­dent Xi Jin­ping at the BRICS Sum­mit in Goa on Oc­to­ber 16.

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