By WANG YIWEI

CHINA is embracing its responsibilities in global governance as it moves towards a more constructive and reforming role.

Providing Public Goods in Materials

Since the start of the financial crisis, China has been acknowledged as a major engine powering global economic growth. Its contribution to the world economy remains at 30 percent, around twice that of the U.S.

President Xi Jinping announced at a summit marking the UN’s 60th anniversary held on September 26, 2015 that a fund will be set up with an initial injection of US $2 billion to support South-South cooperation and assist developing countries with the implementation of their post-2015 development agenda, thereby helping the international community achieve the goals set out in the UN’s 2030 Agenda for Sustainable Development.

China also plans to increase its investment in least developed countries (LDCs) to US $12 billion by 2030, and has written off the debt of outstanding intergovernmental interest-free loans due by the end of 2015 owed by the relevant LDCs, landlocked developing countries and small island developing countries.

The Conference on Building the 21st Century Maritime Silk Road and Advancing International Industrial Cooperation, held in Xiamen City of Fujian Province on September 7, 2016.

China has proposed the creation of a global energy network, using a massive electricity grid to share renewable energy sources around the world. At the International Seminar on the Belt and Road Initiative in Xi’an, on September 27, Wang Yimin, secretary general of the Global Energy Interconnection Development and Cooperation Organization (GEIDCO), said that the proposed global energy connection will be made using a smart grid, an ultra-high voltage transmission network and clean energy. This method will implement the proposal put forward by Xi Jinping at the aforementioned UN Summit that a Global Energy Internet (GEI) should be established to meet the global power demand with clean and green alternatives.

A GEI is an energy network covering the whole globe and its construction involves numerous components including power sources, power grids, equipment, and scientific research and information, so forming a long industrial chain. Creating a GEI will not only improve energy efficiency and guarantee a sufficient power supply, but also expand the development of new businesses and strategic emerging industries such as new energy, new materials, intelligent manufacturing, and electric vehicles. It will thus substantially boost national economic growth, structural adjustment and industrial upgrading.

In March 2016, the State Grid Corp. of China signed an MOU with the Korea Electric Power Corp., Japanese company SoftBank Corp., and Russian company OAO Rosseti, to establish a Northeast Asia grid cooperation scheme, manned by a team comprising workers from China, Mongolia, South Korea, and Japan. UN Under-Secretary-General for Economic and Social Affairs Wu Hongbo pointed out that building a GEI is in our common interest, as it will fuel the green energy revolution, promoting peaceful, sustainable world development.

Building a GEI consists of three stages: facilitating the interconnection of networks within countries; intracontinental networks; and finally transcontinental interconnection. The project is expected to be completed by the middle of this century. By then, renewable energy is projected to rise to more than 80 percent of the total global consumption. Carbon emissions will be capped at 11.5 billion tons (half the 1990 level of emissions), confining the global temperature increase to within 2 degrees centigrade. A new energy consumption pattern will emerge where most of the electricity used will be generated by clean energy sources. If this is achieved, the world will become a “global village” with an efficient power supply, blue sky and verdant lands.

Proposing Institutional Public Goods

China created the Asian Infrastructure Investment Bank (AIIB) and other new multilateral financial institutions, as well as facilitating quota and governance reforms of the International Monetary Fund (IMF).

The AIIB, the BRICS New Development Bank, and the Belt and Road Initiative all originated in China, but their benefits extend around the world. The AIIB is stimulating the reform of the international financial system and revamping 21st century global governance with the motto: “Lean, clean, and green.”

The Belt and Road Initiative focuses on building a collectively beneficial network, working out new modes of cooperation and creating a cooperative platform. It advocates policy coordination, connectivity of facilities, unimpeded trade, financial integration, and people-to-people bonds as their five major goals, so as to build a “green, healthy, intelligent, and peaceful” Silk Road – one of China’s strategies to improve global governance.

   The Belt and Road Initiative intends to establish a comprehensive Eurasian transportation network comprising railways, roads, aviation routes, oil and gas pipelines, electricity lines, and a telecommunications network.

The construction of this infrastructure will contribute to the formation of an economic corridor which will facilitate the development of architecture, metallurgy, energy resources, finance, telecommunication, logistics, and tourism. A huge transportation system will connect the Asia-Pacific region, an important engine of global economic growth, with the world’s largest economic zone, the European Union. 

When the two are connected they will form the longest economic corridor in the world, creating more room for development and new opportunities on the Eurasian continent. It will boost the economies of East Asia, West Asia and South Asia by facilitating trade and investment and deepening economic and technological cooperation. The establishment of free trade zones will lead to the formation of an enormous Eurasian market, which will transform the current global economic landscape and promote the establishment of a new international political and economic order.   

 The Belt and Road Initiative, which China regards as an attempt to explore ways of improving global governance, has drawn the attention of major international economic organizations. Since it was proposed three years ago, over 100 countries and organizations have opted to participate. China has signed cooperation agreements with over 30 countries along the proposed “Belt and Road” route, and agreed to cooperate in production capacity with over 20 countries. International organizations like the UN have been very supportive. Financial cooperation in the form of the AIIB and the Silk Road Fund has been enhanced and a number of significant projects gradually implemented.

China’s State Grid Brazil Holding won the contract on July 17, 2015 to build and operate the second power transmission linking the giant Belo Monte hydro power plant to the national Brazilian grid.

China is a permanent member of the International Electrotechnical Commission (IEC). The State Grid Corp. is one of the institutions qualified to set the international standards in all areas of power engineering. According to Lü Shirong, deputy director of the International Department of the State Grid, the company has investments across Asia, South America, Europe, and Oceania. 

With regard to international cooperation in production capacity, the company started by working as a subcontractor for power transmission and transformation projects in developing countries in Asia and Africa and exporting equipment to those countries, Lü said. After years of development, the company was able to independently take on national power grid projects in many countries. Its Engineering Procurement Construction (EPC) and equipment allowed it to enter high-end markets like the EU, and its ultra-high-voltage technology is now used around the world.

The intention behind the Belt and Road Initiative is not to start a new system that will challenge the existing international order. On the contrary it is conducive to solving current world  problems.

First, it is helping to boost economic development in Africa, whose development was impeded by colonialism, imperialism, and hegemonism. China proposed a “three networks and industrialization” program in Africa, which means building three major transport networks – high-speed rail, highways, and regional aviation – to accelerate infrastructure construction. The program is widely applauded across the continent.

Second, it helps fuel the world economy, which has been lackluster since the outbreak of the global financial crisis, with the growth rate of trade lower than that of the global economy. The initiative is expected to boost consumption and strike a balance between real and fictitious capital.

Third, it helps solve a main obstacle to globalization – that of insufficient interconnectivity. The initiative promotes policy coordination, road connectivity, unimpeded trade, the circulation of wealth, and cultural understanding between Europe, Asia, and Africa. It also advocates the development of a third-party market, creating a win-win and even multi-party winning situation.

Promoting Fairness in Global Governance

At the Fifth Plenary Session of the 18th CPC Central Committee, the Chinese authorities adopted the five development concepts of innovation, coordination, green development, opening-up, and sharing. They are increasingly acknowledged by the international community.

China also believes that it is necessary to advocate the practice of common, comprehensive, cooperative and sustainable security in Asia. This has been demonstrated as having positive effects, encouraging Asia and even the world to abandon the Cold War mentality and zero-sum ideology.

China’s Sinopec is overseeing implementation in Puyang City, Henan Province, of a project to recycle 100,000 tons of liquid carbon per year. Sinopec technicians are shown making preparations to transport newly produced liquid carbon dioxide to an oil-drilling field.

China has long upheld the idea whereby “the world is for all,” and actively participated in making rules for governance in emerging concerns, including oceans, the polar regions, the Internet, space exploration, nuclear safety, anti-corruption, and climate change, with the aim of making global governance fairer and more appropriate. A new type of international relations promoting win-win cooperation and the vision of a global partnership is shaping a new model of international cooperation.

Since the 18th National Congress, the CPC has advocated upholding the correct approach to justice and interests, giving priority to justice, so promoting a new type of international relationship featuring win-win cooperation, as well as creating a community of shared future for humankind, building a global partnership network, and encouraging a common, comprehensive, cooperative and sustainable security concept. China’s proposals and efforts have been welcomed by the international community.

In 2016, China successfully hosted the G20 Summit in Hangzhou City. At the summit, Xi Jinping expounded on China’s outlook on global economic governance. The G20 Hangzhou Summit took innovation as a core achievement, highlighted the development policy in global macroeconomic policy coordination, formed a multilateral framework for investment principles, released a Presidency Statement on Climate Change, and included green finance on the G20 Summit agenda, all for the first time.

The G20 Hangzhou Summit marks a turning point in the transformation of global governance. China’s stance and action has shown that it has paid greater attention to global governance and become more confident and capable in promoting cooperation amongst large countries to enhance global coordination, safeguard world peace, and form a fairer world order.

Global governance shouldn’t mean that the U.S. or the West governs the world, but that the world should be governed and managed by all countries. The participation of developing countries is especially important as they represent the most people. Global governance means collective action that is adopted to deal with global challenges according to the United Nations Charter and other accepted principles of international relations. Global governance must be conducted by all peoples. As an ancient Chinese saying goes, “When the great way is followed, all under heaven will be equal.” 

WANG YIWEI is director of the Institute of International Affairs at Renmin University, and a senior researcher with Chongyang Institute for Financial Studies.