THE world is currently experiencing unprecedented transformation. The process of economic globalization has undergone profound changes, the global multilateral mechanism is undergoing deep adjustments, and the existing international system and the global order need to be profoundly transformed and remolded.
The world economic arena took a drastic blow in 2019 from enhanced uncertainty and instability. As some developed nations’ policies changed, the internal and external environments of emerging Asian economies have also undergone qualitative changes. Asia, as a significant pillar in the global economic landscape, is the region with the most concentrated emerging economies on the international stage in the 21st century. Under the new situation of major economies diverging in growth trends and the new technological revolutions brewing breakthroughs, the interaction between Asia and the world economy presents a new pattern.
The Boao Forum for Asia Annual Conference 2019, held at the end of March, focused on the Asian economy and regional cooperation, analyzed the changes and impetus that China’s reform and opening-up has brought to the Asian economy, and looked forward to future prospects of Asia’s development.
Active Regional Cooperation
At the beginning of 2019, the World Bank and the International Monetary Fund cut their forecasts for global economic growth for this year and next. This indicates that the global economic growth momentum is insufficient, and faces a slew of uncertainties, as well as structural contradictions, and development imbalances.
Subforum of the Boao Forum for Asia Annual Conference 2019 — Belt & Road: Building “Road” for Globalization.
Hans-Paul Burkner, chairman of Boston Consulting Group, stressed that the only corresponding approach that must be taken is to unite together and make concerted efforts. Cooperation is the key response to all uncertainties.
In 2018, Asian economies moved in concert to adopt effective measures to promote more regional integration. According to the Progress of Asian Economic Integration Annual Report 2019 issued by the forum, 17 new agreements were signed in 2017-2018 in Asia, around 70 bilateral agreements are currently under discussion, and high-level multi-member agreements such as CPTPP and RCEP have continued to be significantly accelerated. The Asia-Pacific region is undoubtedly one of the most active regions around the globe, and its economic self-reliance is constantly growing.
In the future, Asia will have bright economic prospects, and is expected to blossom into the largest regional cooperative segment in the world. According to the Asian Competitiveness Annual Report 2019 issued by the forum, Asian economies, which have experienced the Asian financial turmoil and the international financial crisis, have greatly enhanced their ability to resist risks. The regional economic openness and cooperation have maintained momentum, making Asia one of the primary engines that supports world economic development.
Zhang Tao, Vice President of the International Monetary Fund, pointed out that if all non-tariff barriers were lifted, the Asian economy will benefit from an increase of 10 to 15 percent of GDP over the next decade or so.
The Asian Competitiveness Annual Report 2019 also states that as the center of further convergence of international trade in Asia, China’s economy, despite its being subject to impacts of external shock and slowed growth rate, has displayed strong anti-shock capacity, acting as a tower of strength.
Digital Technology – New Dynamics of Asian Economy
In response to the broad and deep technological revolution and industrial transformation around the world today, the Asian economy is calling for a new momentum to maintain sustainable development. The fourth industrial revolution based on digital technology is just such a key element that will reshape the Asian economic landscape.
Dame Jenny Shipley, former prime minister of New Zealand, noted that 5G will be transformative and permanently change many things as we know them. According to her, it will promote the growth of global economy in 2050, and while the proportion of the United States in the world economy will decrease, the share of the Asia-pacific region will rise.
Promoting further regional integration of the Asian economy is an important task for Asian leaders, and digital technology is of great significance for enhancing regional integration in Asia. Hoe Ee Khor, chief economist of the ASEAN+3 Macroeconomic Research Office (AMRO) noted that in the next 10-15 years, Asia’s middle-income population will further expand, and Asia will continue to catalyze integration through digital technology. He pointed out that the recognized best solution is to redefine the rules of the game. Against this backdrop, technology could help us further achieve regional integration, as these technologies are increasingly interconnected, and the stronger the connectivity, the greater the concerted forces will be.
Many industrial workers fear that technological progress will result in unemployment. Regarding this issue, Professor Zhang Yuyan, a senior fellow and director of the Institute of World Economics and Politics under the Chinese Academy of Social Sciences, believed that from the perspective of human development, technological advancement would not necessarily lead to unemployment, but rather increase the number of jobs. The relationship between technological progress and employment is not mutually exclusive.
Hitoshi Suzuki, a member of the Policy Board of the Bank of Japan, also remarked during the forum that certain people are currently creating a dissonant chord concerning cutting-edge technology, arguing that humans will be winnowed out by new technology. Technology, however, progresses slowly, and makes our lives easier. We in response must make adjustments over this long period of time. He held that the most significant thing people must do is to learn how to maintain an open attitude towards the upcoming changes and change ourselves.
It is evident that there is a growing sentiment among society that people must be educated to adapt to changes. Only as people find a way to adapt to the current transformation, can they successfully take control of its direction.
China Promotes Common Development of Asia
Former President of the Philippines, Gloria Macapagal Arroyo, observed that China has evolved into an unprecedented leading position in its own history. Reform and its opening-up have lifted nearly 800 million people out of poverty, and now, China is becoming one of the largest economies in the world.
Arroyo believes that China’s reform and opening-up over the past four decades presented a new economic development model to the world, a model which is helping China continue to blossom into a gigantic economic market, and is making it a development partner of the international community.
The Asian Competitiveness Annual Report 2019 assesses the comprehensive competitiveness of 37 Asian economies around five indicators: business administration efficiency, infrastructure status, overall economic vitality, social development level, human capital, and innovation capabilities. China has ranked ninth for six consecutive years, with its overall economic vitality ranking first.
According to the report, in terms of economic growth, employment, prices, and income, China’s economy is operating steadily in a reasonable range, the economic restructuring has been continuously optimized, and the quality and efficiency of development are constantly improving.
Former French President Francois Hollande noted that today, China is excelling in technology and has technical expertise in quite a number of fields and has already made many high-quality products all over the world. What China should do now is choose a model that is open to the world. China’s model is one of constant self-adjustment and self-definition, and has established important cooperative relations with a lot of important regions of the world, which has contributed to maintaining growth and ensuring a peaceful international environment.
Against the backdrop of the spread of global protectionism, China has adhered to expanding its openness, firmly supported trade liberalization and economic globalization with a series of measures, and the openness dividends have benefitted the global economy, especially Asian countries.
Li Baodong, secretary general of Boao Forum for Asia, remarked that the intra-regional dependence on trade and direct investment has remained above 50 percent, and regional integration in Asia has accelerated.
As a major initiative to build a new pattern of all-round opening-up, the Belt and Road Initiative has vigorously promoted Asia-Europe economic integration and enhanced the competitiveness of Asia. Countries along the routes, through joint construction and consultation, have catalyzed mutually beneficial trade and investment, promoting the formation of a large market in the Asian region.
As of now, 126 countries and 29 international organizations, including many Asian countries, have signed the Belt and Road Initiative cooperation agreements with China; the accumulated trade volume of goods between China and the countries along the routes during the period of 2013-2018 exceeded US $6 trillion, with foreign direct investment upward of US $60 billion, creating more than 200,000 jobs for locals.
Zhang Yuyan pointed out that the “Belt and Road Initiative,” as a new platform for international cooperation, is inclusive in nature and is conducive to resolving the uncertainties facing the world economy.
The implementation of the initiative also enables countries along the route to benefit from cultural exchanges, medical cooperation, education, poverty alleviation, inclusive finance, tourism, ecological protection, and bridging the digital divide. These benefits consolidate the basis of public opinion for participation in the initiative, thereby strengthening the social foundation of regional economic integration in Asia.
Over the past six years since the Belt and Road Initiative was proposed, regional cooperation has been expanded. Building an open, inclusive, balanced, and win-win initiative for Asian countries is an effective approach to resolve the global uncertainties and to realize a community with a shared future for mankind.
David Daokui Li, the Mansfield Freeman chair professor of economics of Tsinghua University and director of the Academic Center for Chinese Economic Practice and Thinking, remarked that China has now become the largest engine and shock absorber in the global economy. Looking ahead, China should further participate in global joint governance, and work with Europe and the United States on international trade rules. He held that it is China’s task to change from joining globalization to global co-governance.