Shaking off the pandemic blues
Emerging Asia economies, led by China, seen steering post-COVID world recovery
Sustainable development efforts and digitalization hold the key to economic growth and recovery in the aftermath of the pandemic, with Asia playing an important role, officials and business leaders said at a recent forum.
“Given that we haven’t defeated COVID-19, were there to be any new epidemic, it’s hard to imagine how we could cope,” said Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission. “Hence, sustainable development is the only way forward for humanity.”
Guo made the remarks at the opening session of the 14th Asian Financial Forum on Jan 18. Held over two days, the online forum was jointly organized by the government of the Hong Kong Special Administrative Region and the Hong Kong Trade Development Council.
A number of topics were covered at this year’s AFF, ranging from postpandemic recovery to fintech and entrepreneurship. More than 160 international speakers discussed the theme “Reshaping the World Economic Landscape”. Over 63,000 participants from some 70 countries and regions watched the event online.
“Today’s world is witnessing historic changes,” said Guo. “Asia may play a prominent role in the development of world civilization as it once did a few centuries ago.”
Noting that China has set out development goals to realize socialist modernization by 2035 and transform into a great modern socialist country by 2050, Guo said the country, which aims to reach carbon neutrality by 2060, has made great progress in green development.
Looking forward, Guo said innovation should become the key driver of modernization. “We need to deepen policy reforms in areas of science, technology, education and finance, and nurture more talent to the financial system,” he said.
Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor said her government had recently launched a strategic plan to support a greener and more sustainable future to boost Hong Kong’s low-carbon transformation.
Paul Romer, a recipient of the Nobel Memorial Prize in Economic Sciences in 2018, told a keynote session that innovative and effective public responses enunciated “why China and Asia are showing the world the way”.
Impressed by China’s use of mass testing to stop the spread of COVID-19, the American economist said he appreciates Asia’s comparative success in containing the virus.
Innovation is required not only in the economy but in government, he said. “The danger in the United States and Europe was that people thought they already knew what to do,” Romer said.
Citing a calculation by the International Monetary Fund, Luxembourg’s Minister of Finance Pierre Gramegna said about $12 trillion, or nearly 12 percent of the global gross domestic product, has been mobilized worldwide to mitigate the impact of the pandemic.
In a panel session, Gramegna said the world needs to focus on two essential transitions, namely the green climate transition and digitalization.
Teresa Czerwinska, vice-president of the European Investment Bank, said the financial architecture must be fully aligned with global climate conditions.
“Acting effectively on climate change requires a deep transformation in both production and consumption modes, a transformation that is only possible by means of development, scaling and uptake of low-carbon and digital technologies,” said Czerwinska.
Jin Liqun, president and chairman of the Asian Infrastructure Investment Bank, said the COVID-19 pandemic has exposed the vulnerability in the global economic chain, of which the weakest link is health.
“Allocating a sufficient amount of resources to healthcare development is very important,” said Jin.
In a panel discussion on the global economic outlook, Jose Vinals, group chairman of London-based Standard Chartered, said it will still take a couple of years for the world to go back to pre-COVID-19 levels.
“Emerging Asia, particularly in Asia-Pacific, is leading the recovery and will continue to do so,” said Vinals. “China is going to be a major force contributing to the global economic growth.”
Alfonso Garcia Mora, vice-president for Asia and Pacific at the International Finance Corporation, said the pandemic has further increased the use of digital channels and accelerated the innovation of disruptive solutions, especially digital banks.
Hong Kong Green Finance Association Chairman and President Ma Jun emphasized that carbon neutrality targets of China and other countries will provide plenty of opportunities for the finance sector.
A Family Office Symposium was held as part of the AFF event.
Amy Lo, chairman of the Private Wealth Management Association, said Asia-Pacific is now home to the highest number of billionaires, with around half of them coming from China. She was citing the annual Billionaire Insights report jointly published by Swiss investment bank UBS and global consultancy PwC in October.
“Despite the pandemic, the total number of Chinese billionaires has actually increased to a new record high of 415, with a total combined wealth of approximately $1.7 trillion,” said Lo, who is chief executive of UBS Hong Kong and co-head of wealth management for Asia-Pacific at UBS Global Wealth Management.
Delivering special remarks at the AFF on Jan 19, Secretary-General of Organisation for Economic Co-operation and Development Angel Gurria said the prospects for 2021 are brighter as vaccine rollouts have begun.
Gurria said OECD’s cooperation with China on services trade has promoted an open market for trade and investment.
In the new year, Gurria said a major lesson from 2020 should not be forgotten. “The only way out of this crisis is by working together.”
In a dialogue session, Stephen A. Schwarzman, chairman, CEO and co-founder of investment firm Blackstone, predicted that Asia will do well in global recovery, and that the West will have a tough first quarter or two before a V-shaped pickup in summer or so.
“In Asia, countries did much, much better” than countries in the West in terms of controlling COVID-19, he said.