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OPINION | Xin Hua: China's three steps to shaping globalization that benefits all


14 March 2017 | By Xin Hua | CGTN

  • Shaping Globalization

    A man walks past the podium at the Belt and Road summit in Hong Kong May 18, 2016. / CFP Photo

T

he cornerstones of the institutional foundations of global governance are cracking at an accelerated speed, due to the heavy blows brought on by the dramatic changes taking place in the world economy and global politics.

The current wave of globalization, which started at the end of the Cold War, is losing its momentum and may actually start to go backwards, because the economic profits it generated are gradually going down and the problems of inequality that it created in the past few decades are reaching a point of eruption with large swaths of national populations across the world.

Problems with globalization felt across the world

The US is deliberately hollowing out the framework of the World Trade Organization (WTO) and attempting to build a new system which it may continue to dominate.

The UK is determined to break away from the European Union and is currently entangled in the process of negotiating “Brexit” with the rest of the EU, sending out shockwaves felt across the world.

The sudden ‘abortion’ of the TPP (Trans Pacific Partnership) before it was born, the impasse of TTIP (Transatlantic Trade and Investment Partnership) negotiation, the growing protectionism in the US and Europe, and the shaky European integration riddled with internal and external crises, all foretell a gloomy and inauspicious prospect of global governance on the horizon. 

China: beneficiary of old globalization and champion of new globalization?

However, while the existing global governance structure is being fragmented to some degree, China may become a new powerhouse to reinvigorate the world economy and rejuvenate global governance. As both a beneficiary and a sincere supporter of globalization, China has been developing in line with the growth of the world economy. Its rise is one of the most outstanding achievements of this wave of globalization.

Now a global giant in terms of its economic weight and international influence, China becomes a progressive power that has both a capacity and a desire to rectify the existing flaws of global governance and to shape its future. Actually China has come up with a set of new approaches to carry forward global governance for the benefits of emerging economies and developing countries.

The role of BRICS in new globalization

As one of the major emerging economies of the world, China understands the needs and concerns of other members of BRICS (Brazil, Russia, India, China, South Africa) and has an empathy for them, because China shares with them the tough experiences of being treated unfairly by developed countries and represented inadequately in the major institutions of global economic governance, such as the International Monetary Fund (IMF) and the World Bank.

China has a common aspiration to coordinate macroeconomic policy-making more frequently and obtain financial resources more effectively for the BRICS countries. China wants to take a leading role to build a cooperative mechanism for all the members of the BRICS, which takes the form of a multi-layered complex of summits, high-level meetings, regular forums and the BRICS Development Bank. Through these mechanisms, the paths and paces of all the emerging economies may become interconnected, and they may converge into a force to shape the future direction of world economy.

Globalization through regional integration and China’s Belt and Road initiative

The second approach that China proposes to preserve and promote globalization is to push forward intra and inter regional integrations through its spectacular “Belt and Road” initiative. As a major trading power, China needs streamlined and efficient networks of transport, infrastructure, and finance outside its border to facilitate the flows of its goods and investment, but the divergent and even fragmented systems within the Eurasia Continent as well as along its coast line not only impede trade flows, but also block the exchanges of information and talents.

In order to remove the barriers that hinder the economic interconnectivity between China and other countries of the Eurasia Continent, China is implementing its Belt and Road initiative, which is a grand plan to construct a “new silk road economic belt” and a “maritime silk road”, covering 64 countries extending from East Asia to West Europe. Through jointly-invested large-scale infrastructure projects funded by the “Asia Infrastructure Investment Bank” (AIIB), China is actually facilitating and molding economic integrations between and within East Asia, South Asia, Central Asia, and Central and Eastern Europe.

Working to make the existing global institutions better

The third approach that China is strongly advocating and pushing forward by its own efforts are the reforms on the long-standing and seemingly authoritative international institutions that evolved from the early stages of the Bretton Woods System, such as the IMF, the World Bank, and the Asian Development Bank. Striving for increased representation of non-western countries, China has successfully changed the share-holding structure of the IMF and helped to redesign the distribution pattern of Special Drawing Rights (SDR), resulting in a transfer of shares from developed countries to the BRICS and a more flexible policy-making mechanism.

China has also effectively pushed for similar reform measures in other international economic institutions and brought the concerns of emerging and developing economies into high-level multilateral frameworks for global governance, such as Asia-Europe Meeting (ASEM) and G-20.

In brief, amid its economic growth and rise, China’s fate has already become intertwined with global governance, which is largely correlated to its own growth and prosperity. For this reason alone it is important for China  to take initiatives to set the agenda and shape the structure of these systems.

Step by step, China must endeavor to mend the deficiencies of the existing global governance system and to reignite its vitality. Despite the ominous signs of possible retreat or even reversal of global governance and the world economy, China keeps its faith and devotes itself to construct an interconnected world of common prosperity based on a win-win pattern and respect for mutual benefits.

The author is research professor of the Center for EU Studies at the Shanghai International Studies University. He is also director of research of the Shanghai Institute for European Studies and councilor of the Shanghai Council for Asia-Pacific Economy.

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