Globalization as solution, not scapegoat

Updated 2017-07-09 12:19:37 Xinhua

The global economy is showing improvement, but any gains could be compromised without a greater commitment to globalism and free trade.

The IMF recently raised its forecast for the global economy for the first time in almost a decade, but it also warned that recent improvements were built on a weak basis. A rule-based and open trading system is vital for world prosperity.

The G20 summit is a habitual occasion for leaders to renounce protectionism. It will make greater sense at this year's summit in Hamburg, as protectionist sentiment is gaining steam. [Special coverage]

Leaders of the world's major developed and emerging economies need to drop myopic nationalist approaches and work together to resolve trade differences and build a new trading order while paying due respect to globalization.

Globalism-as-solution is easily transformed into globalism-as-scapegoat.

As globalism feeds into populist narratives, it provides justification for some Western leaders to deflect attention from their own policies and lay blame on others.

For instance, the United States is considering imposing broad new steel tariffs or quotas based on national security grounds, mainly targeting the world's major steel producers such as China and Europe.

However, a study by the Peterson Institute for International Economics shows, although China is the world's largest steel-producing country, less than 1 percent of its steel products are exported to the United States.

Furthermore, China is working to redefine its role in the sector, making bold moves to downsize production capacity.

As the IMF has put it, history has shown that the myopic pursuit of zero-sum policies only ends by hurting all countries.

The world economy works far better for all when policymakers engage in dialogue and work within agreed mechanisms to resolve disagreements.

In its latest report, the Bank of International Settlements points to the benefits that free trade brings to the world: higher living standards and reductions in poverty. A prerequisite of this is the free flow of goods and services.

At the Hamburg summit, Chinese President Xi Jinping called for concerted efforts to foster new drivers for growth, more inclusive growth and improved global economic governance.

"We must remain committed to openness and mutual benefit for all so as to increase the size of the global economic 'pie,'" he said.

While major developed countries backtrack positions on trade, it is important for emerging countries to speak with one voice to steer the world economy in the right direction.

The global financial crisis that emanated from the United States and the subsequent eurozone debt debacle make a mockery of the idea that developed countries have the full knowledge to deal with these problems.

Meanwhile, emerging economies became the new anchor of global growth with their huge resilience. They have become too significant to be excluded from discussions about global governance.

China posted a forecast-beating growth rate in the first quarter, with GDP up 6.9 percent year on year, the quickest increase in 18 months. It has been a major stabilizer and driver for the world economy, contributing more than 30 percent of global growth in recent years.

It is relevant and important that countries support the multilateral trading system, observe jointly established rules and seek win-win solutions to common challenges through consultation.

It is false and distracting for countries to respond to each other's protectionism by erecting wall, and more akin to shooting themselves in the foot.

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