China says there’s no going back from globalisation
Vice-Premier Zhang Gaoli champions benefits of an integrated economy over the rising tide of protectionism
China said it is time to face the reality of globalisation, using its attendance at an Asian summit to try and counter the protectionist sentiments that are rising across the Pacific and in Europe.
“We should try to solve the economic imbalance, promote a more inclusive economic globalisation and let it light every corner of the world,” Vice- Premier Zhang Gaoli on Saturday told the Boao Forum for Asia , an annual summit to deliver Asian – particularly Chinese – voices on global issues.
Zhang did not elaborate on China’s plans to achieve its global goals, except “firmly maintaining the World Trade Organisation-centred multinational free trade system” and “pushing forward the early implementation of a China-Asean free trade zone and the early conclusion of Regional Comprehensive Economic Partnership (RECP) talks.”
While the US has withdrawn from the TransPacific Partnership (TPP) trade deal and plans to modify the 23-year-old North American Free Trade Agreement, China, the biggest beneficiary of economic globalisation, has pinned its hopes on leading a new wave of free trade. The RECP is widely regarded an alternative to the US-dominated TPP, and one in which China can play a big role, although it is still in the planning stages.
For the moment, China does not appear ready to take the leading role in global trade.
It has instead been trying to convince the administration of US President Donald Trump, which has talked about using punitive tariffs to bring manufacturing jobs back to the United States, to change its stance.
Trade is expected to be one of the key topics at a meeting between Trump and President Xi Jinping, expected to take place at Trump’s Mar-aLago estate in Palm Beach, Florida in April.
Zhou Xiaochuan, governor of the People’s Bank of China, said at the forum that globalisation was “a challenge that you can’t avoid”.
Zhou said that reallocating resources to manufacturing would simply not be efficient for some countries.
Instead, he called for nations to give more training to labourers who would move from one sector to another, and to focus on strengthening knowledge-based industries.
Because of American insistence, the recently concluded Group of 20 central bank governors and finance ministers meeting did not mention the fight against trade protectionism in its joint statement.
Zhou said international policy coordination would take time, and that hopefully there would be clearer language on free trade and globalisation at the G20 summit in July in Hamburg.
Jin Liqun, president of the Asian Infrastructure Investment Bank (AIIB), said: “There are no losers in a globalised economy, although the benefits can vary in degrees. Within one country, those sectors or those workers losing their jobs should be helped by the macro and social policies of the government.”
“The blame game works in nobody’s interests,” he said. “You have to adapt, and you have to reform.”
The United States and Japan have not yet joined the China-led AIIB, although its membership has expanded to 70 and is expected to be at more than 85 by the end of this year. The lender will be one of the main tools to promote China’s “One Belt, One Road” trade scheme.
Zhu Min, former deputy president of the International Monetary Fund, said that more resources should be given to support multinational institutions while global interconnectivity was still rising.
“That’s a very important way to support globalisation,” he said.