China stands firmly with multilateralism

China stands firmly with multilateralism

Shipping containers at a port in Shanghai, China. (Reuters)

For some time, officials, scholars and media in the Gulf region have been paying great attention to the ongoing China-US economic and trade friction. I share a common view with them that a global economic recession could be the outcome and this could hurt us all. In a world of profound economic interdependence, we are all vulnerable to the impacts of the current trade friction. No country, including the Gulf Cooperation Council (GCC) economies, can stand alone from its negative spillover.

Up until now, China has engaged in multiple rounds of consultations with the US in an effort to stabilize the bilateral commercial relationship. In my view, the key to a successful agreement is credibility. Yet the US administration has backtracked on its own commitments and taken a winner-takes-all approach in these consultations. Therefore, it is impossible to reach a mutually beneficial, win-win agreement, not to mention its follow-up implementation. Recently, the US Treasury designated China as a currency manipulator. In fact, the renminbi’s depreciation in early August was driven and determined by market forces, reflecting shifts in market dynamics and volatilities in global foreign exchange markets. The International Monetary Fund, in its just-concluded Article IV consultation, came to the conclusion that the renminbi was broadly in line with the fundamentals of the Chinese economy. 

In the past 40-plus years of reform, China has shared opportunities and benefits with the rest of the world through two-way opening up and actively integrating itself into the international division of labor and the global industrial, innovation and value chains. We put faith in multilateralism and stood firm in the face of difficulties. Our efforts finally paid off. China has not only achieved its own development, but also brought benefits to the international community. In the past few years, statistics show that China, as the world’s second-largest economy with an annual growth rate of more than 6 percent, has contributed nearly a third of world economic growth and has undoubtedly became a global economic powerhouse.

To be honest, the current Chinese economy is indeed under some pressure. Yet it is highly resilient and the growth remains strong and robust. This July, the actual use of foreign capital increased by 4.1 percent compared with last year, reaching $8.07 billion, which is a new high in 2019. Foreign investors are voting for confidence in China’s economy. By rolling out nationwide the management system of pre-establishment national treatment plus a negative list, while establishing six new pilot free trade zones, an enabling environment for business has been put in place for foreign investments. In the first half of 2019, China’s economy has registered steady growth and has been operating within a proper range. The economic fundamentals remained stable with positive momentum.

We are all passengers on the same boat, and no one can be a winner if the boat is sinking.

Zhao Liuqing

The global economy, on the other hand, is indeed facing major challenges, as protectionism and anti-globalization are spreading across the world. We are all passengers on the same boat, and no one can be a winner if the boat is sinking. Joint challenges require joint efforts. In this regard, history could be a mirror. Eleven years ago, facing the international financial crisis, 20 major economies from across the world put enormous effort into supporting multilateralism to coordinate macroeconomic policies and support free trade and investment, thus stabilizing the global economy, promoting market confidence and gradually lifting growth. Now, we are once again standing at a crossroads. Either we pursue our own development at the cost of others, or we can renew the spirit of partnership and carry out joint efforts in making globalization more inclusive and ensuring it brings more benefits to our people.

For China, we stand firmly with multilateralism. We support strengthening international institutions and improving international economic governance. We must abandon the zero-sum mindset in global policymaking and pursue shared growth through discussions and collaboration. It is our belief that only by cooperating with international partners, including the GCC countries, the Association of Southeast Asian Nations and the EU, can China truly achieve its own development. We uphold the principle that cooperation should be on an equal footing and mutually beneficial.

The GCC countries are China’s most important economic and trade partners in the Middle East and North Africa region. Later this year, Saudi Arabia will assume the presidency of the G20. High expectations and the spotlight of the world will then be on the Kingdom. Saudi Arabia is therefore uniquely well placed to play a major role in steering the world economy to be stronger and more sustainable, balanced and inclusive. China has full confidence in Saudi Arabia’s leadership.

  • Zhao Liuqing is Counsellor for Economic and Commercial Affairs at the Embassy of China in Riyadh.
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