Multilateralism vital to global recovery
World must stand united against COVID-19 and preserve the trend of economic globalization
The world is united by a common aspiration to defeat COVID-19 as early as possible and get the global economy back on its feet. First, pressing challenges facing the world have made closer communication, cooperation, and policy coordination imperative. People’s health and lives are under threat with people-to-people exchanges stalled, industrial chains seriously affected and financial markets experiencing turbulences, as the global public health crisis, economic crisis and social crisis are intertwined.
According to authoritative international organizations, this year the global economy will contract by 4.4 percent, trade will drop by 9.2 percent and foreign direct investment will fall by 30-40 percent. Countries have taken strong stimulus measures, raising the average deficit-toGDP ratio by 9 percent. Some economies have seen their debt level reach record highs, with monetary and fiscal policy pushed to the limits.
In this interdependent, globalized world, be it COVID-19 response or economic recovery, the only option for all countries is to take coordinated measures. The top priority for the world now is to establish and improve dialogue and consultation mechanisms at various levels, and work together on epidemic control and treatment, and macroeconomic policy coordination. We should put people’s lives above everything else and work for a speedy rebound of global growth.
Second, we should stay committed to multilateralism and reform and improve the global governance system at a faster pace. Since the end of World War II, the United Nations, World Bank, International Monetary Fund and the World Trade
Organization, as organizers of global public goods, have helped form a relatively effective global governance system. Our world on the whole has maintained tranquility, progress and prosperity.
Unfortunately, some forces are acting against the trend of the times. They have been trying to decouple economies and have willfully walked away from international commitments, posing challenges to multilateralism. And they have imposed sanctions, raised tariffs, and erected trade barriers at will, undermining market rules and hampering sound global growth.
Multilateralism is the right way to address the global governance deficit. We should firmly uphold multilateralism and the rule-based international order, and work constructively to resolve problems and deficiencies in the existing system through dialogue, consultation and reform.
All parties’ concerns, not just those of powerful ones, should be fully accommodated. Major countries, in particular, should jointly provide more public goods and take the lead to uphold and advocate the world order and the rule of law.
Third, we should accelerate the transition from old growth drivers to new ones and promote a digital transformation of the world economy. Every crisis is also a historical opportunity for technological and industrial transformation. To some extent, COVID-19 offers us a window of opportunity to accelerate digitalization of the world economy, address climate change and promote green development.
With 4 billion internet users worldwide, and with production and life increasingly moving online, telemedicine, online education and e-commerce have shown their distinct strengths. Artificial intelligence, 5G technology, big data and the industrial internet are booming. Digital economy will be an important driver for green recovery in the post-COVID era, which is what the New Economic Forum focuses on.
We should give equal emphasis on development and security, deepen international cooperation on digital innovation, strengthen digital infrastructure and set rules for convenient and efficient global digital connection as early as possible, so that technological innovation will open up even broader space for economic development.
As President Xi Jinping said: “The world is battling the COVID-19 pandemic as it goes through profound changes never seen in a century. Yet, peace and development remain the underlying trend of the times.”
The current situation may be complex and challenging, but I am confident that if countries stand and act together, the trend of economic globalization and multilateralism will keep moving forward.
The author is the chairman of the China Center for International Economic Exchanges. This is an excerpt of his speech at the 2020 New Economy Forum held through video link from Nov 16 to 19. The views do not necessarily reflect those of China Daily.