Bi Jingquan, Executive Vice Chairman of China Center for International Economic Exchanges (CCIEE); Vice Chairman of the Committee on Economic Affairs of the 13th CPPCC National Committee.
Since early in 2020, the coronavirus pandemic has spread around the world, transforming how we live and work. It has sent the world economy into a tailspin, held back international exchange activities and the global flow of people, and led to a significant drop-off in global trade and investment. As the pandemic dims the prospects for what is already sluggish globalization, unilateralism, protectionism and populism have raised their faces. At the same time, however, we have seen many positive developments, such as accelerated economic integration at the regional level, IT application at a faster rate and a more balanced approach to efficiency and security in global supply chains and industrial chains. In response to these challenges and opportunities, China and the United States — the world’s two largest economies — need to work together on many fronts. Here, I’d like to talk about globalization and China-U.S. trade and economic ties.
First, globalization has delivered tremendous benefits to human society.
Driven by economic globalization since the 1970s, the world economy and global trade and investment have registered a significant increase, and the share of the population living in poverty has fallen sharply. In the past half-century, global GDP has more than quadrupled; global per capita GDP has more than doubled; the contribution of trade to the world economy has risen from 27 percent to 60 percent; and FDI net outflows have jumped from $13 billion to more than $1 trillion. Meanwhile, the global extreme poverty rate fell to 9.2 percent in 2017 from 42.3 percent in 1981.
Globalization has enabled countries, large and small, to participate in global resource allocation and have dramatically increased their economic efficiency. As part of the global division of labor, all economies share in the gains of trade, investment and innovation, although to varying degrees. Developed economies reap handsome profits from the global market, and developing economies benefit from technological advances, knowledge accumulation and participation in the restructuring and optimization of the global industrial system.
Second, both China and the United States are beneficiaries of globalization.
The two economies are highly dependent on international markets and are increasingly interdependent. Thanks to its abundant labor supply, China has grown into a global manufacturing center. As the world’s most important advanced economy, the U.S. plays a dominant role in technological innovation, enjoys the financial advantage of a dollar-based monetary system and leads the way in economic globalization.
Between 2001 and 2019, China’s GDP increased nearly fourfold, its foreign trade quadrupled and the amount of paid-in foreign investment received every year increased by 97 percent. U.S. figures over the same period were 40 percent, 90 percent and 40 percent, respectively. The statistics reveal that both China and the United States are beneficiaries of globalization and of their expanded economic relations.
Third, China and the United States should take a long-term view of their frictions.
Given the notable differences in their cultural and historical backgrounds, frictions will occur in bilateral relations and a variety of problems will appear in their trade and economic ties. But all these frictions and problems can be addressed, so long as the two sides act on the principles of mutual respect and equal-footed consultation and accommodate each other’s major concerns. In fact, they did exactly so in the past four decades and the years since the launch of reform and opening-up in China, especially in the past two decades following China’s accession to the WTO. Their tremendous economic and trade ties have become the anchor and stabilizer of their relations.
Fourth, China and the United States need to place their relations back on the right track.
Over the past four years, bilateral relations experienced unprecedented challenges and nosedived to their lowest point in decades. We all understand that these frictions cannot be allowed to continue indefinitely and that it is necessary for the two countries to figure out solutions together.
Last week, a new administration took office in the United States, offering an important opportunity for China-U.S. relations to get back on the right track. I believe that the two countries need to resume high-level strategic dialogues and contacts, along with government-to-government dialogues on various fronts and at multiple levels. Meanwhile, they need to consider the elimination of extra tariffs imposed on each other, resume normal people-to-people exchanges and trade ties, consider the elimination of unreasonable restrictions on Chinese companies investing in the United States and restart negotiations on a bilateral investment treaty. These are all important initiatives that promise to bring benefits to the people of both countries and are also crucial to responding to the pandemic and kick-starting the global economy.
Fifth, China and the United States need to strengthen two-way cooperation within multilateral frameworks.
Both countries shoulder heavy responsibilities for globalization and multilateral governance. President Biden has announced his country’s return to the Paris agreement and the World Health Organization, which I think is a very important signal. We hope the U.S. will play an important role. For China and the United States, an urgent priority now is to cooperate on issues of climate change and global public health, coordinate their positions on the WTO reform agenda, promote and facilitate trade liberalization and reboot the global economy. They also need to strengthen communication and coordination within multilateral mechanisms, such as the United Nations, the G20 and APEC, and enhance cooperation in such areas as trade, finance, the digital economy, public health and global security.
Sixth, China must continue on the path of reform and opening-up.
The Communist Party of China defined the direction and tasks of China’s economic and social development in the near future at the fifth plenary session of its 19th Central Committee in 2020.
In this new historical stage, China will continue on the path of reform and opening-up, and by opening wider to the rest of the world enhance domestic reform across the board and push for high-quality development of the economy. Now it has signed the RCEP agreement, reached a comprehensive investment agreement with the EU and announced its intention to readily consider joining the CPTPP. Moreover, it will be more focused on intellectual property protection, which is necessary to improve the business environment and achieve innovation-driven development.
Ladies and gentlemen, as President Xi Jinping said, “There is only one shared future for humanity. As we cope with the current crisis and endeavor to make a better day for everyone, we need to stand united and work together.” Although the coronavirus pandemic has planted a major obstacle in the path of economic globalization, the defining trends of openness and cooperation remain intact. We hope that China and the United States will strengthen communication and cooperation, work together to address global challenges and unknown risks and push globalization toward greater openness, inclusiveness, shared benefits, balance and win-win results.