Inclusion not exclusion

By Xie Fuzhan | China Daily Global | Updated: 2019-07-08 08:42

In an increasingly integrated world, building an open global economy is more important than ever

Through the international division of labor and a global market, economic globalization has allowed countries to embrace vital economic, production and development opportunities around the world.

Globalization has also promoted the flow of goods and capital, furthered the progress of science and technology and boosted cultural exchanges, injecting strong impetus for the prosperity and stability of the world.

Since economic globalization is irreversible, countries must adapt to the trend, proactively address the problems that have emerged to ensure it benefits all nations and people.

Opening-up produces progress while exclusiveness undoubtedly leads to backwardness.

This view stems from China's experience drawn from its 40 years of reform and opening-up, and is true of the economic development of many countries.

China has contributed to opening the global economy and benefited from the trend. Since it launched its reform and opening-up policies in 1978, the average growth rate of China's economy has been 9.5 percent and its contribution to the global economy has risen from 1.8 percent to 15.8 percent. The country's total imports and exports of goods have increased from $20.6 billion to $4.62 trillion since then, with its utilization of foreign direct investment exceeding $2.1 trillion and outbound foreign investment totaling $2 trillion.

Since the global financial crisis of 2008, China has taken opening-up as a fundamental approach to coping with the effects of the crisis and promoting its growth instead of shutting its door to the outside world, which has allowed more countries to share the opportunities offered by its development.

Over the past years, China's economic growth has contributed over 30 percent to global economic growth, with its economy playing a key role in stabilizing and driving the global economy.

The global economy is undergoing profound changes and economic globalization is developing amid obstacles. Changes to the global governance system and the international order are accelerating even as the United States, the world's largest economy, has carried out a string of beggar-thy-neighbor measures centered on protectionism and unilateralism, largely undermining multilateralism and the free trade system and exposing the open global economy to unprecedentedly severe challenges.

According to data from the Global Trade Alert database, the US has added more than 1,770 new protectionist measures since November 2008, the most in the world.

Last year, the US added 217 new measures, up 36.5 percent compared with the previous year.

For its own benefit, the US which once advocated and promoted "free trade" has turned against open global cooperation, which has not only led to the rapid deterioration of the global economic and trade environment in recent years but also setbacks in the current Sino-US trade talks.

In contrast, China has launched a new round of major strategic measures in recent years focusing on improving its institutions and structures with higher-level opening-up.

In April 2018, at the opening ceremony of the Boao Forum for Asia Annual Conference, President Xi Jinping announced four major measures to widen China's opening-up, including widening market access, creating a more favorable investment environment, improving intellectual property rights protection and expanding imports.

Separately, at the opening ceremony of the first China International Import Expo in November last year, President Xi unveiled new measures to open China wider, including tapping into the potential of imports, easing market access, creating a world-class business environment, developing new zones of opening-up and promoting multilateral and bilateral cooperation.

China's high-quality economic development has seen increasingly growing impetus as it furthers reform and opening-up, which will bring greater development opportunities to other countries around the world.

In the next 15 years, China is expected to import $24 trillion worth of goods and absorb $2 trillion of foreign direct investment, while its total outbound foreign investment is forecast to reach $2 trillion.

The rise of US protectionism and unilateralism and the foreign-trade frictions they have triggered have severely undermined the stable and sound development of international trade and the global economy.

According to data from the World Trade Organization, the growth rate of dollar-denominated goods exports of the world's major economies such as the European Union, Japan, China and the US in the first quarter of this year fell sharply from the corresponding period the previous year, in which that of the four economies dropped 23.7 percentage points, 16 percentage points, 12.3 percentage points and 6.5 percentage points, respectively.

In April this year, the World Trade Organization lowered its prediction for the 2019 growth rate for international trade by 1.1 percentage points from the forecast figure in September last year to 2.6 percent.

Further, the International Monetary Fund lowered its global economic growth rate forecast for this year to 3.3 percent, a record low since 2010.

Therefore, building an open global economy is more important and urgent than ever.

The author is president of the Chinese Academy of Social Sciences. The piece is edited excerpts from his keynote speech at the International Forum for Open Global Economy in Osaka, Japan, on June 25. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.