Ukraine crisis: China must prepare for ‘fragmented’ trade blocs, global financial crisis, Beijing adviser says
- Russia-Ukraine war could lead to the formation of three geopolitical blocs and stir another global financial crisis, a top Chinese adviser says
- Beijing should push ahead with deeper economic reform and market opening to defend globalisation, experts say at a Beijing symposium
Russia’s invasion of Ukraine is an ideological confrontation that threatens to make the world more polarised, while Washington’s sanctions blitz on Moscow could backfire causing a US dollar crisis and financial disaster, one of China’s top policy advisers says.
In a newly-published speech, David Daokui Li, head of Tsinghua University’s academic centre for Chinese economic practice and thinking, said the war could lead to the formation of three major geopolitical blocs and stir another global financial crisis.
“The struggling globalisation process could change directions and the global economy could become fragmented with ideologically-close countries forming their own economic, trade and investment blocs.”
To prepare for growing risks, the world’s second largest economy should position itself as a global hub for yuan-denominated financial products to lure overseas investors and establish more international organisations to strengthen international influence, he said.
Li, who received his PhD from Harvard University and was a member of staff at the University of Michigan in the 1990s, is an expert in China’s development theory.
His keynote speech, made at a closed-door symposium titled “China and the World Under Dramatic Changes” on March 31, partly explains Beijing’s refusal to denounce the Russian invasion, despite mounting Western pressure.