In What Direction Is Global Governance Moving?

From: English Edition of Qiushi Journal Updated: 2013-08-20 15:09
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The global economy stumbled into the year 2013 under the shadow of the European sovereign debt crisis and the US “fiscal cliff.” This has presented us with a series of questions: What is wrong with the world economy? How should we approach governance? What can the international community do to provide institutional guarantees for sustainable development? And what role will China, the world’s largest developing country and fastest growing emerging economy, have to play during this process?

The world today is undergoing profound and complex changes. Despite this, however, peace and development remain the underlying themes of our times. A number of trends can be seen at present: multi-polarity and economic globalization are deepening; cultural diversity is increasing; society continues to be reshaped by information technology; a scientific and technological revolution is leading us towards new breakthroughs; and global cooperation is taking place on a growing number of levels. In particular, we have seen the rapid rise of several emerging economies and the robust growth of many developing countries. These countries are coming to enjoy increasingly high status in global governance as their overall strength continues to grow. Exerting a profound influence on the geopolitical landscape, and bringing about changes to the global economic landscape, they have become an important force for world peace, stability and common development. These changes are conducive to the establishment of a new international political and economic order that is just and equitable. They are also favorable to the advancement of democracy in international relations.

However, we must realize that the world is still a long way from tranquility. The influence of the global financial crisis has stretched far and wide; the world economy is still struggling to mount a recovery as growth is overshadowed by growing factors of instability and uncertainty; imbalance in global development has intensified; and global issues such as climate change, food security, energy and resource security, and cyber security are becoming increasingly serious. As international cooperation and development come up against new challenges, the outlook for the world economy leaves no room for optimism.

The Fifth BRICS Summit was held in Durban, South Africa, March 26-27, 2013. The theme of the summit was “BRICS and AFRICA: Partnership for Development, Integration, and Industrialization.” / Photo by Xinhua reporter Huang Jingwen

The countries of the world have been brought closer together by economic globalization. We may say that if one prospers, all will prosper; but if one suffers, all will suffer. Under such severe and complex international conditions, no country is able to thrive without the help of others, and no country has the capacity to cope by itself. The only way out for the international community is to continue to stick together in these times of difficulty. This will involve efforts to make up for institutional shortcomings; efforts to establish global development partnerships that are more equitable and balanced; efforts to share powers and divide responsibilities; and efforts to meet various global challenges together, with a view to boosting the common interests of humankind.

With the concerted efforts of all parties, new strides have been made in the reform of global economic governance over recent years. Despite this unprecedented progress, however, the global financial crisis is far from over, and the structural problems exposed during the crisis are yet to be fundamentally resolved. Therefore, it is imperative that we proceed with the reform and enhancement of global economic governance. These efforts will allow us to put effective guarantees in place that will ensure the stable, sustained, and sound development of global economy.

Global economic governance should reflect changes in the global landscape. In accordance with the principles of coordination, cooperation, equity, and balance, we must ensure that all countries are able to participate in widespread global governance. In particular, emerging markets and developing countries should continue to be given greater representation and a louder voice. With regard to agendas, deliberations, and decisions in global economic governance, we must ensure that all countries are able to participate on equal terms and equally express their opinions and concerns. Doing so will guarantee that the outcomes of global governance accord to the interests of all sides. This way everyone comes out a winner. At the same time, we need to take a pragmatic, result-oriented, and step-by-step approach to global economic governance.

The international community should continue to deepen the reform of the financial system. Priority tasks at present include implementing the 2010 IMF Quota and Governance Reform Package, and improving the mechanisms of international financial regulation, particularly those concerning the regulation of financial innovation, cross-border capital flows, and credit rating agencies. We need to increase the usage of the IMF’s Special Drawing Rights (SDRs) and improve the composition of their currency basket, with a view to establishing an international reserve currency system with stable value, rule-based issuance, and manageable supply. We also need to improve coordination and cooperation between governance mechanisms at various levels, thereby making comprehensive use of the United Nations, the G20, BRICS, the SCO, and other mechanisms.

All countries should promote the establishment of a balanced multilateral trade system that is beneficial to all parties. Continued efforts should be made to promote and facilitate free trade and investment, to remove trade barriers, and to oppose and resist protectionism in all its forms. International institutions should be supported in strengthening their monitoring of restrictions on trade and investment. At the same time, inclusiveness and openness across numerous multilateral and bilateral trade arrangements should be advocated. Efforts should also be made to promote the achievement of comprehensive and balanced results at the Doha Round of WTO Talks at the earliest possible time. Through concerted efforts to create a global trade environment and a global trade system that are free, open, just, and equitable, we will be able to ensure that people from all countries are able to enjoy the benefits of free trade.

All countries should strive to promote international cooperation and development, and work to establish a new model of global partnership for development that is more equitable and balanced. We should provide the United Nations and its specialized agencies with support so that they can continue to play an important role in international cooperation for development. We should also ensure that the World Bank and other international institutions play a greater role in promoting development. These will help to provide solid guarantees for international cooperation and development, so that we will be able to assist developing countries in achieving the Millennium Development Goals (MDGs). The international community should put development issues higher on its agenda. It should regard efforts to eradicate poverty and achieve common development as the core of the international development agenda after the year 2015, and negotiate new development goals that are brief, clear, balanced, and pragmatic. In addition, the international community should actively implement the achievements of the United Nations Conference on Sustainable Development. Adhering to the principle of “common but differentiated responsibilities,” the international community should support all countries in adopting policies and measures to facilitate green development. It should support all countries in finding a balance between economic development, social progress, and environmental protection; support them in the realization of inclusive growth; and support them in following a path of sustainable development that is suited to their national conditions.

The resolution of development issues represents both the goal and the core of our efforts to strengthen global economic governance. This is because development is the only thing that really counts. At present the speed of global wealth accumulation is increasing, but the North-South gap is also widening. The North-South imbalance constitutes the biggest imbalance in global development, and the biggest obstacle to the overall development and prosperity of humankind. For a long period of time, inequalities between developed and developing countries with regard to resource possession, wealth distribution, and opportunities for development have hindered the sustained and steady growth of the world economy. Fundamentally speaking, genuine world development is only possible when developing countries are able to develop fully, and genuine world prosperity can only be achieved when the most underdeveloped countries are able to shake off poverty and become rich. As long as more than one billion people are threatened with destitution and starvation on a long-term basis, and as long as more than 40 countries remain severely underdeveloped, there will be no way of fundamentally defusing economic and financial crisis. As long as that is the case, global economic governance will struggle to make progress, and world stability and prosperity will be unsustainable.

As a developing country and a major emerging country, China is an advocate, practitioner, and promoter of global governance. As far back as the 1970s, Deng Xiaoping called for the establishment of a just and equitable new international political and economic order at the United Nations General Assembly. Since the beginning of the 21st century, China has taken an active part in global governance, setting forth new ideas with regard to security, civilization, and development, and calling for efforts to build a harmonious world and a harmonious Asia. Following the outbreak of the international financial crisis of 2008, China has actively responded to the challenges that the crisis has posed. We have participated fully in the G20 debate on global governance; strengthened macroeconomic policy coordination with other major countries; increased our contribution to the IMF; done what we can to aid other developing countries; taken an active part in the Doha Round of WTO Talks; and promoted regional economic integration. In doing so, China has made due contributions to the advancement of global governance.

China’s future role in global governance is the subject of great interest. In fact, a clear response to such speculation was given at the Eighteenth National Congress of the CPC. China is the largest developing country in the world. Moreover, China is still in the primary stage of socialism, and will continue to be so for a considerable period of time to come. Holding high the banner of peace, development, cooperation, and mutual benefit, China will continue to promote equality, mutual trust, inclusiveness, mutual learning, and mutually beneficial cooperation in international relations. It will engage in joint efforts to uphold international fairness and justice, adopt a more active stance in international affairs, and play its due role as a major country with a strong sense of responsibility. China will unswervingly follow the path of peaceful development. It will adhere to a mutually beneficial strategy of opening up, accommodate the legitimate concerns of others whilst pursuing its own interests, and promote the common development of all countries as it seeks to advance its own development. In summary, China upholds the principle that rights and obligations should be balanced. As an active participant in global economic governance, China will work to make the international order and system more just and more equitable.

Whereas developing countries represent a new driving force behind global governance, major emerging countries are the pacesetters. As the largest developing country in the world, China will continue to be a reliable friend and sincere partner of developing countries. An important basis of China’s participation in global governance is to strengthen unity and cooperation with other developing countries and firmly uphold their legitimate rights and interests. China will strive to establish a new model for relations between major countries that is characterized by long-term stability and sound development. It will work to ensure that all countries can widen cooperation, properly address differences, and achieve mutual benefit in the process of global governance.

(Originally appeared in Qiushi Journal, Chinese edition, No.5, 2013)

Author: Assistant Minister of Foreign Affairs of the People’s Republic of China

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