Wrong prescription

JIN DING/CHINA DAILY

Editor’s note: The world today is undergoing major changes and the global economic structure is facing great uncertainties. The backlash of globalization, competition between major countries, the decoupling and breaking of industrial and supply chains are all problems that can be answered by analyzing the contradictions in the process of global openness. Assessing the level of openness in the world, the 2022 Global Openness Report reviewed hot topics at the frontiers of global openness and reviewed China’s achievements in opening up to the world. over the past decade from an objective point of view. The report revealed for the first time this year the level of openness of various countries since the outbreak of COVID-19, which showed that the global openness index in 2020 continued to show a downward trend. decrease.

The backlash against globalization will not help solve the problems of developed countries

Over the past 40 years, China’s policy of reform and opening up has enabled the country to maintain an average annual growth rate of 9.2 percent and lift more than 800 million people from the extreme poverty, thus marking a significant contribution to the cause of global poverty. reduction.

One of the main reasons that enabled China to achieve such results was its internal reform – the transition from a planned economy to a market economy – and its openness to the world.

Openness is not only important for China, but also for the world.

Between the end of the Second World War and 2008, only 13 of the more than 200 developing economies in the world had achieved an annual growth rate of 7% or more and for 25 years or more.

What these 13 economies have in common is that they are all open economies. Why is openness so important? From the perspective of the new structural economy, if a country or an economy wants to develop well, it must develop its industries according to their comparative advantages, so that industries with comparative advantages have low production costs and make good use of international markets to explore economies of scale. Industries without comparative advantage must depend on imports and take full advantage of international resources, products, capital and technologies. In this way, the economy will develop stably and quickly with low cost and high quality.

In 2015, the United Nations adopted the 2030 Agenda for Sustainable Development Goals, which includes 17 very important goals, such as ending poverty and hunger and ensuring good health. Such ambitious goals can only be achieved with an open global economy.

But we know that there have been backlashes against globalization in recent years. One of the main reasons for this is that there are many internal problems in developed countries. For example, after the global financial crisis of 2008, these countries failed to initiate the necessary structural reforms. This has led to their sluggish economic performance, lack of improvement in citizens’ incomes, and problems in the labor market. In addition, the long-standing problem of the income gap has not been resolved, which fuels tensions within these countries. These developed countries blamed their domestic tensions on globalization and used it as a scapegoat for their own failures. There is a Chinese saying that only by prescribing the right medicine can you cure disease. This backlash against globalization will not help solve the problems of developed countries and will present many obstacles to the growth of developing countries.

Therefore, in the face of the backlash of globalization, developing countries should concertedly pursue the opening up of economic growth and continue to promote globalization.

The author is Dean of the Institute of New Structural Economics and Honorable Dean of the National School of Development, Peking University. The author contributed this article to China Watch, a think tank powered by China Daily. Opinions do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn

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