Comments on the Declaration on World Economic Development (Zhuhai Declaration) (7)
By Yu Yongding, research fellow, director of Institute of World Economics and Politics, Chinese Academy of Social Sciences, and He Fan, assistant director of Institute of World Economics and Politics, Chinese Academy of Social Sciences
The Declaration on World Economic Development (Zhuhai Declaration) points out, "Under the circumstances of market economy, the countries and economic entities in the world carry on trade in commodities and services and make investment between them. Closed countries and economic entities, however, cannot effectively participate in world economy and their economic development is thus adversely affected. Therefore, all the countries and economic entities should be open to and dependent on each other and enjoy common development in accordance with the rules and regulations formulated by the United Nations and the World Trade Organization."
Globalization has changed the landscape of the world. The stage of mankind is getting bigger and bigger. Through globalization, we and unfamiliar cities and remote rural areas are more and more becoming a community of interests sharing weal and woe. The world, however, is getting smaller and smaller with people from various regions becoming the residents of the "earth village". Countries, poor or rich, big or small, are bound together more tightly by the ties of trade and investment. Globalization has also transformed the vision of the people. Each country, each place is part of the world and at the same time its center. In a scenic and open city of Zhuhai, South China, the wisdom of political, business and academic circles of various countries has converged and the Zhuhai Declaration is to be released. This declaration will convey the attention to and care about the future of a group of leading figures who keep the globe in their minds and express their common desire for peace and development.
Globalization has resulted in the ever-deepening interdependence. Commodities and capital flow more and more across boundaries and the chain of the division of labor stretches longer and longer. Very often a product has already toured the world before it is shipped out of the factory. The result of a round of World Trade Organization negotiations in Geneva may possibly have an impact on the life of farmers in rural areas of Northwest China. The ups and downs of the United States economy will invariably stir up waves in the economies of East Asia across the Pacific. It is getting more and more impossible for one country to develop economy and improve the livelihood of its population under closed circumstances. Globalization is looking for opportunities for the optimum distribution of resources throughout the world. International division of labor has permeated every piece of land on earth. The economic development of each country has been placed onto the stage of global economy. Each country needs to find the role fittest to itself, give play to its comparative advantages, integrate itself into the framework of international division of labor and excel in global competition.
The surging globalization is not only the product of scientific and technological progress and increased productivity, but also the result of innovations of system. After World War II, the establishment of the international economic order headed by the troika of the World Bank, the International Monetary Fund and GATT enabled world economy to march from more than 30 years of wars, hostilities and chaos to peace, cooperation and coordination. In the latter half of the 20th century, the economies of various countries competed with one another for glamour and they prospered day by day. Not only the developed countries went through a "golden era" rarely seen in history, but also the countries of planned economy attracted people's attention with their quick industrialization and the maintaining of high-rate economic growth. The newly industrialized economic entities represented by the four Asian small dragons, exerting their utmost and catching up from behind, have realized to a great extent the dream of backward countries catching up with and surpassing advanced countries. From the above historic experience we may find that a comparatively stable and fair international economic order constitutes the essential guarantee for a smooth development of globalization. And the setting up of international economic order requires the mutual understanding, communication, coordination and compromise. Big powers need magnanimity and small countries vision.
In the 21st century, globalization has entered into a more complicated period. The financial crisis which erupted in East Asia in 1997 has reminded us that on the road to globalization there are brambles as well as flowers and that blind copying of the experience of the developed countries and advancing rashly will only bring about retrogression. International speculative capital has resorted to all kinds of manipulative tricks and both international agencies and domestic monitoring departments have been helpless in front of them. This has cautioned us that the developing countries are faced with a more treacherous environment in their opening to the outside and the fragile developing economic entities are particularly vulnerable. It is essential, therefore, to really enhance macro-control and the capability to respond to crisis. The bursting of the bubble of the new economy has shown us that technological progress must be backed up by firm market demand. And setting store by market demand means facing squarely the present living conditions of the majority of people and their demand for development. A robust recovery has been elusive in the U.S. economy and the economies of other countries will plunge into long-term stagnation. This indicates to us that a unipolar world economy entails tremendous risks whereas multipolarization means more engines added to world economy. Nowadays the gap between the poor and rich countries is widening. Under the influence of globalization, the income gap within a country may also further widen. This warns us that technological progress and economic growth will not necessarily bring about social progress. Disturbance arising from poverty will undermine the growth and stability of the rich countries and the despair of the poor the accumulation of wealth of the rich. The development of the society and the promotion of globalization should be more equal and fair. Such social order and international order are worth cherishing and pursuing by each member of the society and each country.
This is the true picture interdependence has presented to us. Through exchange and division of labor, interdependence may bring about the multiplying of wellbeing, yet through contacts and contamination, it may magnify risks. The Zhuhai Declaration urgently calls that efforts must be made to create a fairer and more rational international economic order to enable every country to fully master the opportunities offered by globalization. At the same time, globalization should be orderly so as to prevent the developing countries from going astray in the jungle of globalization.
Interdependence should be a more equal one between each member of the society and each country. Interdependence is not dependence of the backward, weak and small countries on the advanced, strong and big powers. It is extremely dangerous for the developed countries to monopoly for ever their technological and economic advantages over the less developed ones. Along with the surge of the developing countries, we do not wish to see the revival of trade protectionism and frictions. The superiority of the developed countries in competition lies in their efforts, through the adjustments in industrial structure, to continue taking the lead in the new race. Structural adjustments will naturally entail a relatively heavy price in a short period, but this is the necessary road to Nirvana, the rebirth of the phoenix after its death. The developing countries should learn how to take appropriate measures to respond to the challenges posed by globalization, including pursuing steady and prudent macro-economic policies, rooting out poverty at home, boosting government's capability in management and enhancing the vitality of the system. These measures should be supported and encouraged by other countries in the world and international organizations.
Interdependence should mean a harmonious coexistence between humans and nature. Globalization has facilitated economic growth and the increase of wealth and fostered the ability of mankind to take from nature. Unlimited taking from nature will damage the harmony between mankind and nature, so going against natural laws will make mankind itself suffer from the revenge of nature. Globalization is not limited to economic globalization and it includes also the globalization of environmental pollution, ecological deterioration and infectious diseases. The emerging of these global problems requires the stepped up cooperation between the countries to jointly protect our unique earth. The global market may possibly be part of the issue, but it may also be part of the answer. Market economy is tainted and it should be greener.
Interdependence signifies the common development of the joint community of mankind. Terrorism and ethnic discrimination are evil monsters that have flown out of the opened Pandora's box of globalization. Compared with the exchanges in commodities, the communication of ideas is much more difficult. "Returning violence for violence" will only make the earth more bleak and desolate and underneath poisonous fangs of hatred are buried deeper. Civilizations are not the source of conflicts which stems from people's selfishness, prejudice and ignorance. Estrangement gradually evolves into indifference and indifference into hatred, which is what we should get rid of fundamentally. Attaching importance to the development of humans and dialogue between civilizations are conducive to the setting up of lasting world peace and encouraging greater and more brilliant cultural creations.
In a short period of more than 20 years, China's economy marched from "self-reliance" to opening to the outside and China has become an important player on the world political and economic stage. In recent years in particular, world economy has been for the most part stagnant while, in the vast gloom, China's economy has become a bright spot arresting people's attention. In 2002, China's economy grew by 8 percent. In 2003, despite the shocking impact of the SARS outbreak, the country's economy has forged ahead steadily. The annual direct foreign investment in China has topped $50 billion, making the country the biggest capital recipient in the world. Since its accession to the WTO, China has actively honored its commitments undertaken for joining the world body, which has been highly appraised. More and more people have firm confidence in China's economy.
Currently, China is integrating itself in global economy with increased confidence. This is a new Long March. The experience in the more than past 20 years tells us that the development of China's economy benefited from the resources and technologies introduced from abroad, China's participation in the division of labor and cooperation among the countries and the prosperous world economy and the gradual improvement of international economic order. In recent years, with its increased economic strength, China's sustained and steady growth has begun to more and more repay world economy. Although China's economic development cannot offset the gigantic negative impact of the stagnant U.S. economy, yet it will certainly mitigate the throes in the adjustments of world economy, the economies of the adjacent region in particular. In fact, from holding fast to established ways of doing things to opening the gates of the country, China, during the whole process of opening to the outside, has been rationally on the lookout for its new role in global economy and has conscientiously become a responsible country in world economy. When globalization suffered successive setbacks, China always stepped forward and shouldered its due responsibilities. The active participation of China has, to a great extent, ensured that the vessel of globalization did not run aground or go astray.
China is a big country with comparatively developed coastal regions, so it has a deep understanding of international general practices. On the other hand, with vast and backward hinterland regions, it has a keenly felt desire for economic development. China will make use of this unique status to coordinate the interests of the developed and developing countries and ensure that the development of globalization will be conducive to the prosperity and progress of the great majority of countries. China is also a country boasting an ancient oriental civilization. The Chinese traditional culture has all along stressed coexistence, harmony, tolerance and order. Under the light of traditional culture, after its rising, China will remain a moderate, magnanimous and responsible country. China will make joint efforts with all the governments, enterprises and social walks of life devoted to peace and development to create new brilliance.
(China.org.cn November 6, 2003)
