Key to open world economy

Problems that have arisen in globalization can only be solved by cooperation for inclusive development

The global economy has become very volatile and there are growing uncertainties, and these are creating mounting downward pressure, proof that unilateralism and protectionism are impeding the development of the world economy and will only lead the world to a dead end.

The problems that have arisen in globalization can only be solved by inclusive development, cooperation and the building an open world economy, not unilateralism and protectionism.

China has always championed and been a contributor to an open world economy. And, over the past year, China has put in place many measures to further open up and cooperate with other countries. For example, the Foreign Investment Law that will come into effect on Jan 1 is expected to further improve China’s business environment, while the China International Import Expo is a major effort by China to further open its market to the rest of the world and promote greater global economic and trade cooperation.

Further opening-up by China, the world’s second-largest economy, will give a big boost to the global economy. However, the problems of the world cannot be solved by one country alone. All countries should make a structural shift toward building an open world economy, promote innovation-based growth and forge closer bonds. Nations should settle their differences through various platforms and arrive at consensus through negotiations.

Given their intertwined interests, all countries should uphold multilateralism, and defend the multilateral trade system with the World Trade Organization at its core. Free and convenient trade and investment should be encouraged to inject fresh impetus into global trade and investment. China should coordinate and collaborate with other countries, and align its development strategies with theirs. Countries should explore new growth engines to achieve common development.

China should undertake the following tasks in order to build an open economy:

First, China should deepen its economic cooperation with the Association of Southeast Asian Nations and build an upgraded version of the regional free trade zone. It should align the Belt and Road Initiative with the development strategies of ASEAN countries and strengthen mutual investment, particularly in high-tech fields.

There is huge development potential in northeast Asia. China should carry out practical cooperation with Japan and the Republic of Korea and strive to realize the China-Japan-ROK free trade agreement as soon as possible. Given China’s renewed opening-up efforts and improving ties with Japan and the ROK, China can attract more enterprises from these two neighbors. Also, the capital and technological advantage of enterprises from Japan and the ROK can be used to jointly develop cooperative programs with economies along the Belt and Road route. China and Japan should take advantage of their improving bilateral ties to take economic and trade cooperation to a higher level.

In the long run, China can include Mongolia and the Russian Far East, even the five countries in the Central Asia, in its vision to develop Northeast Asia. Regional resources and market demand should be integrated in pursuit of shared development and prosperity.

In South Asia, economic and trade cooperation between China and India should be promoted, based on the consensus reached by leaders of the two countries.

Second, a multilevel free trade zone should be built. There is a need to learn from China and Singapore’s experience in building free trade zones. And to explore routes to reach bilateral free trade agreements with other countries or forge free trade relationships based on their specific conditions, so as to have a solid foundation for cooperation.

China should also try building free trade zones under different cooperative frameworks, such as China-Mongolia-Russia, ChinaRussia-India, China and the Middle East, BRICS and the Shanghai Cooperation Organization.

Third, major countries should strengthen their coordination and cooperation. A conflict between China and the United States would be detrimental to the world, while cooperation between them is good for all. As big countries, the two should boost cooperation, and manage their differences, thus benefiting the two peoples and people of the whole world.

Also, the European Union is an important player in the global economic arena. No matter what the outcome of Brexit, the EU is China’s strategic partner. China and the EU should face up to the problems, and make substantial progress in negotiating an investment agreement.

Meanwhile, the trade volume between China and the other BRICS members lags far behind that between China and ASEAN countries, which means there is a huge potential to be tapped. These emerging economies should improve their relations to provide a better environment for exchanges and cooperation, so they can better contribute to building an open world economy.

The author is former ambassador of China to Malaysia. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Further opening-up by China, the world’s second-largest economy, will give a big boost to the global economy. However, the problems of the world cannot be solved by one country alone.