By Ai Shiwei
Economic, business, environmental and other issues were addressed and discussed at the three-day Boao Forum for Asia, held between March 23 and 26 in southern China’s Hainan province. On March 25, Chinese Vice Premier Zhang Gaoli delivered a speech regarding the future of globalization and free trade, the main topics of this year’s Boao Forum.
In terms of economic globalization, which requires free trade policy to flourish, China has not only been a beneficiary but also a major contributor since 2001, the year that China officially became a global player by joining the WTO. The economic growth engine of the world has been gradually shifting from the West to the East, and China has grown rapidly over the course of the past 30 years.
Nowadays, China is an indispensable part of the global economy. As China integrates with the world from different angles, mainly economically and culturally, it has come to the point where at each step that China takes forward, there is a drastic impact on Asian and the global economy as a whole. To justify the prospective trend that China is pivotal to future global economic integration, there are domestic and international concerns to be taken into account.
China’s rate of economic development has already peaked. With the implementation of the Belt and Road Initiative, China has enacted and rendered a series of important measures. These include:
Supply-side structure reform
China suffers from overcapacity following 30 years of rapid development and the extensive resource exploitation that facilitated mass production. This has led to a massive imbalance in supply and demand in some sectors. In the field of infrastructure, steel production’s supply far outpaces demand. There is a massive inventory of unused buildings in second- and third-tier cities.
As China has such overcapacity in infrastructure, the Chinese government has enacted supply-side reform policy, which increases emphasis on the market economy. This is a noticeable indicator on how China will transform itself into a more demand-guided economy. With the implementation of such policies, supply that meets demand is hoped to be achieved.
Such policies also demonstrates that China can bring benefit to the economy not just at home, but also on a global scale.
Poverty has always been an issue for China. Last year, China helped about 10 million people escape poverty. In 2017, China plans to lift a further 10 million out of poverty. In 2016, the central and local governments invested more than 100 billion yuan in poverty elimination efforts. Another fund worth 164.5 billion yuan has been established for the year 2017. Additionally, the central and local governments have implemented several new measures to boost rural economies.
The year 2017 is a significant one for China in its quest to eradicate poverty entirely by 2025. Poverty is one of the factors that currently holds China back from being economically dynamic in terms of consumption. In conjunction with supply-side reform, new policies are designed to reinvigorate the Chinese economy and consumption power, which in return will help the global economy.
With the initiation of the Belt and Road Initiative, China is attempting to better connect itself to the world by trading with countries along the ancient Silk Road. Additionally, China has established the Asian Infrastructure Investment Bank (AIIB) aiming to help underdeveloped Asian countries with infrastructure development. By doing so, China would form a huge web in which Asian and European countries can not only trade with one another, but also gradually gain an improved understanding of Chinese culture and philosophy. Exports of Chinese culture can help China establish its role as a global leader.
As the United States suffers from internal bickering, it is inevitable for China to shoulder corresponding responsibility as a global leader. Apart from the Belt and Road Initiative, which benefits China as well as other countries across Asia, Europe and Africa, joining the WTO has also benefited China enormously. China’s export quota has been exponentially increased, which gives China more than enough foreign currency reserves. Both the WTO and the Belt and Road Initiative will empower China to lead the charge of economic globalization and free trade. Currently, there is a free trade zone in Shanghai, which could improve China’s free trade efforts.
Therefore, domestic and international factors have made China a leader in future global economic integration and free trade. The 2017 Boao Forum has made it clear that China is set to take on the responsibilities of a global leader. Also, Asian countries ought to work together as a unit to defeat poverty and other factors holding the Asian economy back. Business and economic cooperation with fairer cross-border trade could bring the Asian economy to a new level, which could also help the world economy enter a new era.