What is China’s role for globalization and revitalized growth? A question that is ever more urgent as globalization comes under threat from protectionist and populist forces. Xi Jinping, President of the People’s Republic of China, in his opening address, gave a resounding vote of confidence for the free market and global trade, offering a historical perspective of globalization as impossible to retreat from while stressing China’s responsible role in the world economy.
“We cannot turn back from globalization and we shouldn’t need to”, said Inga Beale, Chief Executive Officer of Lloyd’s, stressing that in an uncertain new global order we need strong leadership. While China alone will not fill that role, global interaction is “part of China’s responsibility as a large country,” agreed Fang Xinghai, Vice-Chairman of China Securities Regulatory Commission. China is participating more in the global economy and global affairs. Reservations about that participation from as recently as last year’s Annual Meeting already seem to have softened, noted Li Sixuan of CCTV.
As an important player in global systems, given current uncertainty China looks to play more of an intermediary and facilitating role. “China needs to keep its door to the rest of the world open,” said Xiao Yaqing, Chairman of State-owned Assets Supervision and Administration Commission. “There is you and me, and me in you,” he continued, asked to sum up China’s place in the world.
Business and the private sector will be a keystone of growth and job creation, not just in China but globally. Alibaba, whose IPO in 2014 was touted as the biggest of all time, is a “shining example of globalization”, said Thomas Farley, President of the New York Stock Exchange – and there are still over 600 Chinese companies waiting to go public. The Chinese state sector is also crucial, as state-owned companies and enterprises deepen reform to operate within the global market. Economic reform is 38 years old in China, but state-owned enterprise reform is only 20 years old.
How will the role of China’s contribution to the global economy change? In past decades, China’s growth has been driven by exports. Now it is transitioning to a consumption-driven economy, and outbound investment will continue to grow as a way to increase global prosperity. More real estate and foreign companies are Chinese-owned than many realize, stressed Beale. And cinema is a soft-power indicator of growing influence: Hollywood scriptwriters no longer write bad Chinese characters, noted Li Ruigang, Founding Chairman of China Media Capital. “China is using its big market size to influence how Hollywood does its business,” he said.
There are six core areas in which China will aim to drive reform and global growth:
1. Innovation-driven economy, tapping the potential of business both big and small
2. The One Belt, One Road initiative, connecting trade markets across Eurasian land and sea
3. A rising middle class, growing in number and spending power to drive consumption
4. Financial markets liberalization, speeding improvements in the Chinese market
5. State-owned enterprise reforms, opening China’s biggest industries to the world
6. Overseas investment, leveraging Chinese capital to revitalize the global economy
China is committed to being better integrated into the global economy, leading to a bigger cake for all, while ensuring that the distribution of that cake is rule-based. Although China is the second largest economy in the world, it is still far behind number one. But that distance is also potential. There is a long way to go, but China aspires to play a crucial role in global recovery and sustained prosperity.