Support for multilateralism
An expanding world economy needs China and other nations across the globe to embrace multilateralism, European Commission Vice President Jyrki Tapani Katainen told the Global Times in a recent interview.
Katainen added that China and European Union (EU) are on the same page.
“EU has recognized very positive words from Chinese authorities and leadership regarding multilateralism – free, open and rules-based trade,” Katainen said at the EU headquarters in Brussels.
According to Katainen, implementation of the Paris Climate agreement shows the importance of multilateralism that needs countries and entities who are on the same page to work together.
“Closer cooperation is needed among those who believe in the same basic issues such as the Paris climate agreement. China and EU share the view of taking climate change seriously,” Katainen said, adding that multilateralism is the only way to settle disagreements.
Both EU and China want to uphold a rules-based world order instead of taking unilateral steps, Katainen said. “As the world has changed, we have to make sure that multilateral organizations such as WTO serve their purpose.”
Katainen expressed concerns over US attitudes toward the world order. “We have close cooperation with the US on various fronts, but the relationship, especially on trade, is not as good as it had been before,” Katainen said.
Responding to the issue of US trade deficits which President Donald Trump claims are putting the country at a disadvantage while doing business with other economies, Katainen voiced a different point of view.
Citing the example of a mobile phone, he said in a globalized world the profit should be shared by all parties that participated in its production and branding.
“How can you calculate the value of a phone which may have been assembled in China, but the brand value goes to the US?” Katainen said.
“I don’t know the number of countries (where) the parts of a mobile phone come from. But they are part of the global value chain, and you cannot compute the trade surplus or deficits in the way it was done in the 1970s.”
Katainen said there is a need for global value chains in order to maximize the productivity of quality products, which needs the participation of countries across the world as well as the positive flow of global trade.
The European Commission vice president is impressed by China’s development. “China is sometimes extremely fast in big things,” Katainen said. “When we look at artificial intelligence in China, the speed of change has been very fast.”
Since the launch of market reforms in
1978, China has shifted from a centrally-planned economy to one that is more market-based and has experienced rapid economic and social development. Its GDP growth has averaged nearly 10 percent a year – the fastest sustained expansion by a major economy in history – and it has lifted more than 800 million people out of poverty, according to statistics of the World Bank.
Things have moved very quickly in certain areas in the last 40 years. Katainen agrees that China has achieved maturity in a sense that it is involved in competition, and he embraces competitiveness, claiming that Europe is open because EU believes in competition.