Transformation and Upgrading of Emerging Economies and Balance, Inclusiveness and Sustainable Growth of Global Economy

  Time:2015-08-14   Hits:0

By Yin Zhongyi

 

Good morning everyone,

Thank you for the invitation of the host. I would like to present three opinions and three pieces of advices on global economic balance, inclusiveness and sustainable growth.

1. Considered as the consequence of imbalanced and narrow development and serious challenge of growth, the sluggish growth of global economy also contains huge space for sustainable growth.

China has been besetting by such structural problems as unbalance in terms of investment and consumption, urban and rural development, regional development, tertiary industry, domestic and external demand for a long time. Unbalance means too wide gap, while gap means potential.

Many of the world economies, especially emerging economies and developing economies are also facing not balanced, inclusive and sustainable structural contradiction. Once they accelerated speed of structural reform, they will produce strong endogenous impetus to sustainable world economic growth.

2. Transformation and upgrading of emerging economies and developing economies is expected to create huge space for the sustainable growth of global economy and bring about historic opportunities.

Most of the emerging economies and developing economies are facing such structural contradictions as infrastructure development, urbanization and backward development. In accordance with the estimation of the Asian Development Bank, in the next 10 years, the annual investment needs in infrastructure of Asian region is expected to reach $730 billion, while the needs in Southeast Asian region is $2.5 trillion.

Urbanization degree in populous nations such as China, India, Indonesia, Philippine, Thailand and Vietnam is very low. More importantly, the proportion of the added value of service industry of these countries (except India) in GDP lags far behind the average level of the world, which means that potential of service development of these countries is very huge. Therefore, transformation and upgrading of emerging economies and developing economies with service development as major strategy is expected to develop gigantic space and bring a unique historic opportunity for sustainable growth of global economy.

3. Global economic governance is unable to adapt to economic transformation and upgrading of emerging and developing economies.

In the first place, the capacity of global governance is insufficient. There is no special mechanism established by International Monetary Fund, the World Bank or even other multilateral organizations catering to huge demands of infrastructure investment of emerging economies and developing countries. In the second place, regional integration is accelerating rapidly. Such regional integration arrangement as TPP led by developed countries has ruled emerging economies out via some higher liberalization standards, which highly hindered the transformation and upgrading of these emerging economies and also affected the potential space of medium and long-term sustainable growth of global economy.

The core objective of global economic governance has transformed from stabilizing international financial market to economic balance, inclusiveness and sustainable growth. Under such background, as an important platform of global economic governance, G20 should put the following issues on the important agenda: Firstly, treating imbalance and exclusiveness as the potential space for global economic sustainable growth, and putting infrastructure investment, interconnectivity, economic transformation and upgrading of emerging economies and developing economies on the agenda. Furthermore, to form a special mechanism in the framework of global economic governance catering to infrastructure investment needs of emerging economies and developing economies. Secondly, taking the United Nations Development Summit as a chance to earnestly fulfill the commitment of balance, inclusiveness and sustainable growth and to carry on and upgrade UN Millennium Development Goals in order to jointly formulate an equitable, inclusive and sustainable post 2015 development agenda. Thirdly, the “one belt, one road” initiative, the AIIB and the Silk Road Fund initiated by China highly comply with the trend of global and regional economic cooperation and development, which aims at co-building the investment and financing platform for infrastructure construction of emerging economies and developing countries along the belt and road and creating vital external environment for the development of urbanization and service industry of these nations. Consequently, it is necessary for G20 to put co-building of “one belt, one road” on the agenda to expand new space for sustainable growth of world economy and create medium and long-term impetus of balance, inclusiveness and sustainable growth of global economy.

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