WORLDBankdatareleasedonJune7implythatworldeconomicgrowthin2016islikelytobebelow2.4percent.ThisisyetanotheroccasiononwhichtheInter-nationalMonetaryFundandWorldBankhaverecalibratedandloweredtheirpredictionsof2016worldeconomicgrowth.Theeconomicsphereisindeedcurrentlyfraughtwithwidespreadconcernandpessimisticprognoses.
Theexpectedrecoveryperiodafteraglobalfinancialcrisisisfivetosevenyears.However,eightyearshavepassedsincethe2008financialdebacle,andworldeconomicrecoveryremainssluggish.
TheWesterndevelopedworldisstillriddenwithexcessivedebt,highunemployment,andlowgrowth.Thesustainedworldeconomydepression,plustheFederalReserve’sraisingofinterestratesandappreciatingoftheU.S.dollarhavecausedfluctuationsintheglobalfinancialmarket,andfallingbulkcommodityprices.Meanwhile,mostdevelopingcountrieshavesufferedeconomicslowdowns,depreciationoftheircurrencies,andhigherdebts.It’shighlypossiblethattheworldeconomyhasnowreachedthebottomofthe“L-shaped”growthcurve,signifyingthatthesedoldrumswillcontinueforawhile.Thesituationcanbeascribedtofactorscausingperiodiceconomicfluctuations,andanimbalancedworldeconomyinsoreneedofstructuraladjustment.
Itisgenerallyagreedthatthefollowingfactorssignificantlyinfluencetheworldeconomy:
First,China’sremarkablyrapideconomicdevelopmentexertsconsiderableinfluenceontheworldeconomy.Nowatthecriticalstageofstructuraladjustment,thecountryisshiftingtoaneweconomicgrowthmodebasedmoreondemandthaninvestmentandexport,asitsserviceindustrysharesimultaneouslyincreases.What’smore,China’ssupply-sidestructuralreformhaskickedoff,anditseconomicadjustmentachievedpreliminaryresults.
Second,askeycommoditypriceshavestayedlow,certainemergingeconomieswhoseeconomyheavilyreliesonresourceexportsareseeingtheirdebtsmounting,theircurrenciesdepreciating,andtheirGDPcontracting.Takingthefallingcrudeoilpriceasanexample,thisshould,intheory,havestimulatedthedemandforandconsumptionofcrudeoil,andsopromotedeconomicdevelopmentinthecountriesimportingthefuel.Thesluggishnessasawholeoftheworldeconomy,however,hasimpairedthepositiveeffectofthisdropinprice.
Third,inthedevelopedworld,theFederalReservehastightenedU.S.monetarypolicy,sobolsteringthepersistentstrengtheningoftheU.S.dollar.Meanwhile,aneasingmonetarypolicystillprevailsintheEurozoneandJapan.CertainWesterndevelopedcountrieshaveeven,unprecedentedly,resortedtothe“negativeinterest”policytool.TheinterestonGermany’s10-year-termtreasurybonds,forinstance,hasfallenbelowzero.Allthishasexacerbatedinternationalfinancialmarketfluctuations,encouragedthecurrency-hedgingtendency,anddeterioratedtheinternationalfinancialenvironment,soimpedingeconomicdevelopmentintheemergingmarkets.
Fourth,ananti-globalizationforceisrisingintandemwiththeglobalizationtrend,evidentinmountingpopulistandnationalistsentimentsinsomecountries,developedonesinparticular,ascanbeenseenintheU.S.presidentialcampaign,andtheBrexit.
Meanwhile,geopoliticalconflictsbetweengreatpowersareworseningandglobalstabilityisunderthreat.Anti-globalizationhasfueledpoliticalisolationismandtradeprotectionism,sounderminingthefoundationofbigpowercooperationaswellasthespiritofbravingadversityinsolidarity,bothnecessaryforworldeconomicgrowth.Thedownwardtrendintheworldeconomyisdifficulttoreversewithoutadequatecooperationbetweenmajoreconomiesinthemacro-economyfield.
Inthiscomplexinternationalenvironment,theinternationalcommunityisnaturallylookingtoChina.Withitsongoingeconomictransformationandanticipatedmid-tohigh-speedgrowthunderthenewnormal,theyhopetheAsianpowermightcontinuetobetheengineofworldeconomicdevelopment,andcontributetotheworldeconomy“ChinesewisdomandChineseplans.”Thisexplainswhytheinternationalcommunityhasplacedsuchhighhopesonthisyear’sG20SummittobehostedbyChina.
Theworldeconomyhasnowreachedaneraofnewindustrialrevolutionwhereinfresheconomicandfinancialmodesemergeoneafteranotherandgainrapiddevel-opment.Inviewoftheovertneo-liberalismofWesterncountriesliketheU.S.andtheshatteringoftheWashingtonConsensus,thewholeworldseeksanewgrowthanddevelopmentmode.Astheworld’ssecondlargesteconomythatcontributesmorethan30percenttoannualworldeconomicgrowth,andtakingintoaccountthe2016G20rotatingpresidency,whatshouldChinadoamidtheworld’slanguideconomicgrowthtoboosttheworldeconomy?
First,goodmanagementofitsdomesticaffairsisChina’sbiggestcontribution.China’scomparativeadvantageasregardseconomicgrowthischangingdramatically.Thecountry’sopening-updrivehasreachedanewstagecharacterizedbyhigh-qualityforeigninvestmentandlarge-scale“goingglobal”(includingcapitalexports).Chinaneedstoopenupitsserviceindustrywiderandpromotetheupgradingofitsindustriesalongtheglobalvaluechain,sotobetteradapttotheeconomicnewnormal.
“Underthecurrentsituation,theinternationalcommunityhasgreaterexpectationsoftheG20leadershipasregardsitssolvingofprominentproblems,soaddingimpetustoworldeconomicrecoveryandgrowth,”China’sCommerceMinisterGaoHuchengsaidatthe2016G20TradeMinistersMeeting.Undertheguidanceofitsoverallnationaldevelopmentstrategy,ChinaisactivelypushingforwardsuchprogramsastheBeltandRoadInitiative,thecoordinateddevelopmentofBeijing-Tianjin-Hebei,andthebuildingoftheYangtzeRiverEconomicBelt.Chinawilldoitsbesttobringintofullplayitssocialistmarketeconomyadvantages,andsorealizeindustrialupgradingandeconomictransformation.
Toensuremid-tohigh-speedsustainableeconomicgrowthandcontinuanceofitsroleasoneofthemajorworldeconomicgrowthengines,Chinamuststeadilyadvanceitseconomictransformationandbuildanopeneconomicsystembytakingadvantageofthenewindustrialandinformationrevolutions.Thecountrymustalsocontinueitssupply-sidereformwhileboostingtheaggregatedemandinlightoftheconceptofinnovative,coordinated,green,open,andshareddevelopment.
Second,ChinashouldenactitsworldeconomicleadershiproleasakeymemberofG20andthe2016rotatingpresident,andfurthercoordinatemajoreconomies’macro-economicandfinancialpoliciesinordertoavoidanynegativespillovereffectofthepoliciesofcertainbigpowers.Itmaythusmitigaterisksoffinancialturbulenceandenhancemarketconfidence.
DevelopedWesterncountries’conflictingmonetarypolicieshaveworseneduncertaintiesintheglobalfinancialsystem,aphenomenonthathistoricalevidenceconfirmsagainandagain.Theiralternateeasingandtighteningofmonetarypolicyhavetriggeredseveralfinancialcrisesinemergingeconomiesinrecenthistory,forexampleinLatinAmericancountriesinthe1970s,andinAsiainthe1990s.Thehard-wonwealthofthosecountriesandpeoplesthusvanished.
Asaworldmajoreconomyandrepresentativeofdevelopingcountries,Chinaisexpectedtofightfordevelopingcountries’rightsandinterestsininternationalentitiesliketheIMF,WorldBankandG20,andtoparticipateinreformingtheexistingworldfinancialandmonetarysystems.ChinashouldalsomakeeffortstopromoteSouth-SouthCooperationbyresortingtosuchnew-typeinternationalfinancialinstitutionsastheBRICSDevelopmentBank,SilkRoadFund,andAsianInfrastructureInvestmentBank.Thegoalistobuildupdevelopingcountries’capacitytoresistexternalfinancialrisksandcopebetterwiththeaccompanyingfinancialdisturbance.
Third,Chinashould,asitgainsmorevoiceintheworldeconomicandfinancialarena,activelyleadglobaleconomicgovernancesystemreforms,firstofalltotheworldfinancialandmonetarysystems.Itshouldalsoproactivelypushforwardimplementationofmeasuresbyinternationalfinancialinstitutionstostrengthenmanagementofinfluentialcross-borderbanksandfinancialinstitutions,accordingtotherequirementsofleadersofG20memberstates,thuslayingasoundfoundationforworldeconomicgrowth.
Since2008,shiftsintheglobalpowerbalanceandemergingnewsituationsintheworldeconomyhavestrengthenedthedemandformajoradjustmentandreformoftheglobaleconomicgovernancesystem.TheWest-dominatedsystemshouldshifttoonefeaturingjointgovernancebyboththeWestandEast.Newconcepts,newmechanisms,andnewmethodsarethusneeded.Asaglobalpower,Chinashouldplayaleadingroleintheworldeconomy,andgraduallyadvancereformsoftheglobaleconomicgovernancesystem.GreathopesrestonChina’sroleasbellwetherattheupcomingG20Summitforpushingforwardglobalreforms.
Somereformmeasureshavesurfaced,forexamplesteadilyadvancingRMBinternationalizationanddiversifyingpricingcurrenciesforbulkcommoditiessoastoreducebigfluctuationsinbulkcommodityprices.
AsrequiredbypreviousG20Summitleaders’declarations,thefragmentationofglobalgovernanceandgeopoliticaltensionsareissuesthatmustbeimmediatelyaddressed.Agoodglobalenvironmentforfreetradeandinvestmentshouldbecreatedandtradeprotectionismshouldbeopposed.Therearenowasmanyas450freetradeareas.TheTrans-PacificPartnershipAgreement(TPP)andTransatlanticTradeandInvestmentPartnership(TTIP)advocatedbytheU.S.,however,continuetoprecludecountrieslikeChina.Thishighlightstheurgencyoftheseissues.
AIIBPresidentJinLiqun,saidonJune28atasub-forumofthe2016SummerDavosForumthattheAIIBwouldsupportcountriesalongtheBeltandRoad,andthatregionalcooperationwouldbenefitallsides.HEYAFEIisformerdeputyforeignministerandformerdeputydirectoroftheOverseasChineseAffairsOfficeoftheStateCouncil.