Resolutely promote economic globalization

Photo: CGV

Chinese President Xi Jinping attended the 2017 Annual Meeting of the World Economic Forum in Davos, Switzerland, and during the opening session on January 17, 2017, he delivered a keynote speech titled “Jointly Shoulder Responsibility of Our Times, Promote Global Growth”. President Xi called for unrelenting promotion of economic globalization and “charting the right path for economic globalization.”

Over the past five years, the world has undergone profound changes.

First, the US government has changed. When President Xi attended the World Economic Forum in 2017, former US President Donald Trump was about to take office, while Joe Biden was then Vice President. The domestic and foreign affairs of the United States underwent obvious changes – Trump pursued “America first”, and later Biden emphasized “America is back”.

The second is the novel coronavirus pandemic. Previously, economic globalization encountered significant contradictions such as insufficient growth momentum, lagging governance and unbalanced development, but people-to-people exchanges between countries could be guaranteed. Now that the pandemic has lasted for more than two years, face-to-face diplomatic activity has largely reduced, while most diplomacy is done virtually. In this context, the promotion of economic globalization comes up against growing difficulties.

Has globalization progressed in the past five years? The answer is yes – it’s not being pushed by governments, but vastly accelerated by technological advancements. The development of the digital economy has accelerated global interconnectivity, while climate change has compelled the international community to strengthen global cooperation.

The irreversibility of globalization is driven by technology rather than politics. In the past, WTO negotiations were the main driver of globalization. But today, the digital economy and the Internet are irreversible and cannot be decoupled. No country can disassociate itself from another. It is the greatest irreversible factor of globalization. Therefore, even though there have been many factors that have not been conducive to globalization over the past year, the world continues to move towards globalization, albeit at a slower pace.

The second reason why globalization has not reversed course is climate change. The United States signed the Kyoto Protocol, the first international protocol aimed at reducing the impact of human beings on the climate, but abandoned the agreement in 2001. At the 26th United Nations Conference on Climate Change in Glasgow last year, China and the United States issued a joint declaration in favor of climate cooperation which was instrumental in the final outcome of the conference. It seems to be a climate issue, but it is essentially a pragmatic issue of sustainable development, low carbon economy, technological innovation and economic transformation. Climate change is another pressing task of globalization, and mitigating it requires global governance and partnership.

Over the past five years, globalization has given rise to a new phenomenon: regional integration, bilateral and plurilateral integrations are replacing multilateral integration. The CPTPP is activated and the RCEP has entered into force, both complementary to globalization. Although the WTO has lacked a unified agreement among 164 economies over the past five years, many plurilateral agreements are in the pipeline. For example, the plurilateral negotiation between 67 WTO members on domestic regulation of services was successful.

We see that today’s globalization is different from what it was in the past, and that it is irreversible. Just as President Xi said five years ago, “Any attempt to cut off the flow of capital, technology, products, industries and people between economies and to redirect ocean waters to secluded lakes and streams is simply impossible. Indeed, it goes against the historical trend.” Economic globalization will continue to advance, although it will face new challenges.

The greatest challenge facing globalization is how to solve the development crisis, which requires enhanced cooperation between multilateral mechanisms such as the UN, World Bank, IMF and WTO. It also needs the coordination of the OECD, G20 and other platforms to promote cooperation on the 2030 Agenda for Sustainable Development. Developed countries should take responsibility for helping underdeveloped countries.

Reforms of multilateral mechanisms, of the WTO in particular, must keep pace with the times. Everyone agrees that the current global pattern is different from that of the past. Previously, globalization was dominated by Western countries under the Bretton Woods system. But now China and many other Asian economies are emerging. The majority of the 164 members of the WTO are developing countries. The WTO adopts the practice of decision-making by consensus. However, as each member has its own interests, it is difficult to reach a complete consensus and it is imperative to reform the WTO.

Another challenge is the severe shortage of global public goods. In the context of the pandemic, the United States and some other countries have increased protectionism, leading to the breakdown of global industrial and supply chains. The United States should assume its responsibilities as the largest developed economy. The United States and other developed countries should not just worry about themselves.

The article was compiled by Global Times based on an interview with Chen Fengying, a researcher at the China Institute of Contemporary International Relations. [email protected]