CAI MENG/CHINA DAILY
In the last four years there has been an increase in opponents of globalization, accompanied by a significant increase in unilateralism and protectionism. Various destabilizing, unpredictable and unpredictable factors have emerged, bringing unprecedented risks and challenges to the global economy.
With this in mind, the 14th annual meeting of the New Champions, also known as the Summer Davos Forum, held in Tianjin late last month, aimed to lead the international community in collectively seeking ways to address global economic risks and challenges. Together we shape a fairer, more sustainable and resilient global economy.
Decoupling carries risks
In the course of economic globalization, national economies around the world are becoming increasingly interconnected. Factors such as production efficiency, growth potential and development opportunities are no longer a matter for a single country, but represent common global concerns.
However, economic globalization also brings with it growing challenges stemming from imbalances in global development, governance difficulties and persistent problems of equity. It should also be noted that these challenges are not inevitable consequences of the process, but rather the accumulation of various obstacles hampering it and a result of the weakening of the multilateral trade mechanisms underlying a stable global economy.
The key to addressing these challenges lies in building a more open world economy at higher levels and resolutely promoting economic globalization in more open, inclusive, equitable, equitable and mutually beneficial ways.
In recent years, a number of black swan and gray rhino events have taken place around the world, which have had a tremendous impact on the global economy. Faced with growing risks and obstacles, certain countries have chosen to politicize economic and trade issues and seek decoupling and fragmentation, leading to confrontations and conflicts and severely affecting the security and stability of global supply chains.
These measures appear aimed at returning the global economy to a bygone era of isolation – a strategy that has already shown in the past that it has failed to mitigate global risks and instead poses further threats to an already fragile global economy. Countries that adopt hegemonic and coercive policies not only pose economic risks to others, but also expose their own economies to a high level of vulnerability.
Cooperation is the only way out
Not only are the resources strongly networked between countries in the course of globalization – the risks are also the same, because economic problems and crises within a country can spread quickly and lead to global economic problems. For this reason, global challenges require a concerted effort, and unity and cooperation are the only way out for global risk management.
Take, for example, the 2007-2009 global financial crisis triggered by the subprime mortgage crisis in the United States. In doing so, the international community learned how important it is to strengthen unity and cooperation in crisis management.
Back then, many financial institutions collapsed, leading to widespread unemployment and a global economic recession. Therefore, in November 2008, the G20 leaders held a first meeting in Washington to discuss the serious financial problems and ended up developing a clear and efficient cooperation mechanism.
The following year, G20 leaders held two more summits in quick succession and reached an important consensus on promoting global economic recovery and combating protectionism. Thanks to the close cooperation between the major economies after the crisis, the world economy recovered quickly and gradually got back on track.
In 2020, the COVID-19 pandemic caused one of the worst global economic downturns since the Great Depression of the 1930s. In addition to the ongoing impact, the global economy also faces political risks as certain major economies put their own interests first. The accumulation of other factors – such as global debt burdens, increasing financial turmoil, food and energy shortages, disruptions in industrial and supply chains, and frequent climate catastrophes – have shown just how diverse current global economic risks can be. Making the right choices will once again test the wisdom of all humanity.
At this year’s Summer Davos Forum in Tianjin, politicians and business leaders from different countries and regions faced global risk challenges and ignited sparks of unity and cooperation, which undoubtedly gave renewed impetus to the world economy.
China offers opportunities
Contrary to the “dependency reduction” or “risk reduction” approaches propagated by some countries, China has consistently promoted closer and mutually beneficial interactions with the world, and has continuously brought security to the global arena through its long-term stable development.
Over the years, China has actively participated in and promoted the process of economic globalization, stimulating the vitality and creativity of market entities, improving the business environment, and developing a higher-level, more open economy. This has led to an open pattern of internal and external connectivity and mutually beneficial cooperation between East and West.
It has also taken a leadership role in opening up and promoting mutual openness among countries and regions worldwide, facilitating efficient, orderly and safe flow of various factors in global manufacturing networks. Through the “Belt and Road” initiative, global development, civilization and security initiatives are actively implemented to build a community with a common future for mankind.
Therefore, China’s stable and positive economic performance poses more opportunities than risks for the world. According to a report by the World Bank, China contributed an average of 38.6 percent to global economic growth from 2013 to 2021 – more than the total contribution of the Group of Seven member countries. This is undoubtedly the main driver of global growth.
With its strong resilience and great potential, the underlying trend of steady long-term growth of the Chinese economy remains unchanged despite the ongoing deterioration in the global economic environment.
According to the World Bank’s Global Economic Prospects, released in June, China’s economy will grow 5.6 percent in 2023, 3.5 percentage points ahead of the global growth rate and an upward revision of 1.3 percentage points compared to the organization’s January forecast.
In order to meet the challenges of the world economy and enhance confidence in global economic growth, the country will continue to adhere to the principles of communication, cooperation and mutual benefit, and provide the international community with more opportunities for dialogue and cooperation. As the world’s second largest consumer market and largest commodity trading nation, it will continue to foster a quality trade and investment environment for partners worldwide and make a greater contribution to global growth and industrial and supply chain security.
The author is a researcher at the Institute of World Economy and Politics of the Chinese Academy of Social Sciences.
The views do not necessarily reflect those of China Daily.
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