21st Century Business Herald reporter Hu Huiyin reported Affected by factors such as the continuation of the epidemic and the risks of geopolitical situations, the economic recovery of countries around the world in 2022 still faces huge challenges.
According to the latest World Economic Outlook Report released by the International Monetary Fund (IMF) on April 19, the global economy will grow by 3.6% in 2022, down 0.8 percentage points from the January forecast. The IMF believes that the rapid rise in fuel and food prices has hit vulnerable groups hardest in low-income countries. In response to high inflation, many economies around the world raised interest rates, leading investors to reduce risk appetite and tightening global financial conditions. In addition, shortages of new crown vaccines in low-income countries may lead to new outbreaks.
On April 20, the Boao Forum for Asia Annual Conference 2022 opened. During the period, Zheng Yongnian, Presidential Chair Professor of the Chinese University of Hong Kong (Shenzhen), Dean of the Qianhai Institute of International Affairs, and Chairman of the Academic Committee of the Public Policy Institute of South China University of Technology, was interviewed by a reporter from the 21st Century Business Herald. While the implementation effect of the Partnership Agreement (RCEP) was implemented, it also talked about the opportunities and challenges that China is currently facing in the “era of limited globalization”.
“21st Century”: The current epidemic is still spreading. What role do you think RCEP has played in promoting the economic and trade pattern in the Asia-Pacific region? As a regional cooperation framework, what role does RCEP play in building multilateral trade and promoting free trade?
Zheng Yongnian: We know that various countries in the world are now developing free trade areas of different forms and natures. Especially after the outbreak of the new crown epidemic and the conflict between Russia and Ukraine, global free trade is facing more severe challenges. The United States has been engaged in “de-globalization” and de-globalization since the Trump era, and economic nationalism and trade protectionism have prevailed; now President Biden is promoting the so-called value-based bloc. In fact, this trade pattern is like going back to the old Cold War era. At that time, the world was polarized, and the trade between the two blocs of the United States and the Soviet Union was almost non-existent. The so-called “free trade” only existed within the two groups.
Over the past four decades, following the collapse of the Soviet Union and the Warsaw Pact, globalization has integrated into what Harvard professor Danny Roderick calls “hyperglobalization.” Economic development is born of “hyperglobalization”. But while “hyperglobalization” has created a lot of wealth for us, it has also led to the polarization of social wealth and the shrinking of the middle class. The result is the rise of populism in the United States and the United Kingdom, which is also the rise of Brexit and Trumpism. s reason. In order to cope with domestic problems, the United States has begun to promote “de-globalization” and de-globalization.
The difference is that although there is competition among Asian countries, we have never had free trade based on ideology. For example, ASEAN has signed “10+1” free trade agreements with China, Japan and South Korea respectively. Competition is inevitable, but this is not based on ideology. I think this competition is healthy and win-win at the same time.
The same is true for the Regional Comprehensive Economic Partnership (RCEP) that we have today. RCEP is different from the TPP advocated by the United States, which is exclusive multilateralism. In contrast, RCEP is more inclusive. Therefore, we have been saying that what China is doing is inclusive multilateralism, which is different from the exclusive multilateralism of the West. The promotion of inclusive multilateralism is to promote common development, which is called “common prosperity” in Chinese words.
Therefore, RCEP is important. Although from the perspective of rules and principles, this seems to be a relatively traditional economic and trade investment, including tariffs, facilitation of investment and trade services, etc., it is indeed necessary. In terms of trade, the volume of trade between Asian countries is not lower than that of the EU and North America, but we do not have many rules and regulations on the rule of law, so the entry into force of RCEP actually shows that the Asian countries that signed this agreement The institutionalization of trade will advance toward the rule of law in the future.
The RCEP came into effect at the beginning of this year and played an extremely important role. The epidemic has affected the economies of countries around the world. For example, in terms of supply chains, various problems have arisen in the supply chains between Europe and the United States and many Asian countries. But so far, the supply chain operation between Asian countries is relatively smooth. Therefore, we cannot slow down the progress of RCEP because of the epidemic, but must move forward as soon as possible. The role played by RCEP is economic and trade-oriented. The current implementation of RCEP is equivalent to promoting the economic development of various countries.
“21st Century”: Against the background of rising global economic uncertainty, RCEP has gradually come into effect in many countries. How do you evaluate the implementation effect of RCEP?
Zheng Yongnian: So far, I think the landing of RCEP is relatively smooth. The current Russian-Ukrainian conflict, energy crisis, food crisis and supply chain crisis have made the outlook for the global economy not optimistic. Therefore, from a regional perspective, RCEP is a bright spot in the regional economy. Because all countries want to seize the opportunity and find a “grab” to boost the development of the local economy.
Of course, RCEP still has a lot of room for development. RCEP focuses on traditional investment and trade, and promotes free trade and economic integration. On this basis there is the next step. Last year, China formally applied to join the CPTPP. I think from RCEP to CPTPP is an inevitable process. After we have established the traditional investment and trade foundation, we will gradually improve the trade standards. China is the world‘s second largest economy. If the CPTPP lacks China, its volume will be much smaller, and it will not play much role. Only by joining together can we share and develop. Because in the regional economy, if only one country becomes rich, its development is also unstable.
In the past 40 years, the reason why countries in Asia have developed well and become the most peaceful and stable region is because countries are spreading and developing step by step. Therefore, the implementation of RCEP has a very important significance to lay a solid foundation for China to join the CPTPP in the future.
“The Era of Limited Globalization” is China’s Opportunities and Challenges
“21st Century”: You have said that we will be in the “era of limited globalization” for a long time. In your opinion, how will China participate in the reform of the international order?
Zheng Yongnian: The “era of limited globalization” marks the end of the “era of hyperglobalization” that ran from 1980 to the 2008 financial crisis. In the “era of hyper-globalization”, capital, technology, talent and labor are highly mobile around the world, leading to the expansion of capital and the weakening of the role of national governments. The current world has entered the “era of limited globalization”, which may return to the globalization from 1945 to the 1980s after the end of World War II, when the government and capital played a greater role.
For many years, Keynesianism was rejected because of the rise of “neoliberal economics”. But I think Keynesianism has its validity. We will once again return to the era of globalization where nations have at least some economic sovereignty. In my opinion, the process of globalization will not stop. The Western capitalist countries headed by the United States have no power to block the flow of capital, technology and talents. Political forces can only set some obstacles, and globalization will continue.
Therefore, in the “era of limited globalization”, China’s role is even more important. When Western countries led by the United States began to implement trade protectionism, China had to go in the opposite direction. Therefore, I put forward the concept of “China needs to enter the third opening up” and “China needs to join the WTO for the second time”. From a historical perspective, more open countries tend to be the winners.
“21st Century”: How will the “era of limited globalization” affect the global supply chain and industrial chain pattern?
Zheng Yongnian: After more than 40 years of growth in an open state, China has occupied the middle and lower end of the global supply chain. To open up on this basis, we must first consolidate the middle and lower end supply chains, and then compete with higher-end supply chains. Sino-US relations are both competitive and cooperative. China also has to compete when faced with a U.S. blockade in areas such as high-tech chips. If we do not develop into the high-end supply chain field, we are likely to face the dilemma of being “stuck in the neck” frequently.
Therefore, I believe that we must continue to deepen opening up to consolidate the supply chain at the middle and lower end, and develop towards the high-end supply chain through effective investment in scientific research and R&D.At the same time, it should be noted that it must be avoided like the United StatesWeaponizing the Supply Chain, otherwise it will cause damage to the entire international economic system. We must become an open economy. When we achieve sustainable development, we can benefit mankind and build a community with a shared future for mankind.
“21st Century”: How should China gradually develop towards a quality economy?
Zheng Yongnian: First, there must be economic development. Last year’s Central Economic Work Conference once again put forward that the focus should be on economic construction. The second is technology. We need to do more research and development, and we need to go to the upper end of the supply chain. Science and technology are productive forces, so it can be seen that many enterprises, whether state-owned or private, have increased investment in scientific research.
But it’s important to note that we cannot innovate with closed doors, but with open doors. In addition, the rules are productive forces, which must comply with the requirements of “building a large national unified market” put forward in the “Opinions of the Central Committee of the Communist Party of China and the State Council on Accelerating the Construction of a Large National Market”, including the unification of policies and rules.
Third, talent is productivity, because behind the knowledge economy is talent. We have made reforms in the mechanism of talent training, not only to cultivate our own international talents, but also to attract more international talents to develop in China. In addition, it is necessary to create a favorable environment for population development and establish a “successful” society.
In the future, in China’s high-quality development, “technology“, “rules”, “openness” and “talents” will all be the key words.
For more information, please download the 21 Finance APPReturn to Sohu, see more