Where should humanity go from here? What kind of future should we create for future generations? Chinese President Xi Jinping raised these questions during his keynote speech via video link at the opening ceremony of the Boao Forum for Asia (BFA) Annual Conference on April 20, citing the backdrop that the combined forces of changes and a pandemic both unseen in a century have brought the world into a phase of fluidity and transformation.

"As we try to answer these important questions, it is crucial that we bear in mind the shared interests of mankind and make responsible and wise choices," Xi said.

To better answer the call of the times, experts, officials and business leaders shared their insights at sessions held during the conference on multiple issues. They believe that an Asian approach should be adopted to promote regional cooperation and China should further contribute to global economic recovery by promoting cooperation under the Belt and Road Initiative and opening wider.

Vision for Asia 

"Over these two decades, Asian countries have advanced regional economic integration and worked in unison to pursue both economic and social development, which has turned Asia into the most vibrant and promising region in the global economy," Xi said.

Asian countries share the hope for peace, development, and openness though they have developed different political systems and religious traditions along their own historical trajectories, and find themselves at different stages of economic development. How to promote regional cooperation was a hot topic for discussion during the conference.

In recent years, the role of Asia in spurring on global economic growth and promoting the reform of the global governance system has become increasingly significant. In 2020, Asian countries accounted for 47.3 percent of the world economy, up 0.9 percentage point from a year ago, as calculated by purchasing power parity, according to the Asian Economic Outlook and Integration Progress Annual Report 2021 published during the conference. The report predicts that in 2021, the Asian economy will improve by more than 6.5 percent.

However, participants pointed out that the economic recovery of Asia still faces multiple challenges stemming from the COVID-19 pandemic, among other factors.

Under these circumstances, Fu Ying, former Chinese Vice Minister of Foreign Affairs, said at one session that it is even more necessary for Asian countries to work together in dealing with various challenges, learning from each other's strengths, and enhancing communication to move forward together.

Regional trade and economic connection will be further enhanced should the Regional Comprehensive Economic Partnership (RCEP) become effective, according to Long Yongtu, former Chinese Vice Minister of Commerce. The free trade pact was signed between the 10 members of the Association of Southeast Asian Nations (ASEAN), China, Japan, the Republic of Korea (ROK), Australia and New Zealand last November, after eight years of negotiations. With the ratification by at least six ASEAN member states and three non-ASEAN members, the agreement will enter into force.

"The 15 economies will gradually move to zero tariffs, which can greatly facilitate the free movement of goods and other production factors among them. And that will in turn greatly improve the competitiveness of the entire region," Long said.

China has taken the lead in ratifying the deal. Other members, too, will possibly approve the pact smoothly, but Japan's attitude still has a hint of doubt to it, Zhang Yunling, Dean of the International Relations Institute at Shandong University, said. "Even if the deal was ratified, it will still require some time to strengthen and deepen cooperation among members," he added.

Moreover, reality holds several thorny issues among the Asian neighbors, especially the territorial disputes between China and Japan, Japan and the ROK, China and India. "In dealing with issues among Asian countries, we should adopt the Asian approach," Zhang told Beijing Review in Boao. "First, we must apply strategic ambiguity across those issues which cannot be solved instantly. Secondly, we require consultation and communication on issues of common concern."

For example, the Japanese Government recently decided to discharge contaminated water from the wrecked Fukushima Daiichi nuclear plant into the Pacific Ocean. Zhang said neighboring countries, likely to suffer the most serious aftermath, should be allowed to dispatch expert groups to Japan to examine and inspect the process, as to ensure the safety of the disposal.

  

Sustainable momentum 

The Belt and Road Initiative will be a major driving force behind international cooperation in the post-pandemic era, according to the participants. In 2020, trade volume between China and other Belt and Road partners reached $1.4 trillion, a year-on-year increase of 0.7 percent, an outstanding feat in a world shackled by COVID-19.

"Going forward, we will continue to work with other parties in high-quality Belt and Road cooperation. We will follow the principles of extensive consultation, joint contribution and shared benefits, and champion the philosophy of open, green and clean cooperation, in a bid to make Belt and Road cooperation high-standard, people-centered and sustainable," Xi said.

"Pursuing green development by promoting clean energy will be among the top priorities for future Belt and Road cooperation," Qian Keming, Vice Minister of Commerce of China, said. "We will incorporate the green concept into the overall process of overseas investment and other projects. Chinese enterprises will receive stimulus to carry out green investment, green construction, green production, green operation and green innovation abroad."

Experts further believe that the concept of sustainable financing could pave the path that leads to resolving the debt issues in some countries.

The debt burdens resting on a number of less developed economies are not the result of their participation in the Belt and Road Initiative, Jin Liqun, President of the Asian Infrastructure Investment Bank, said.

"For those heavily indebted economies, if other countries stop providing loans to them, their debts and other issues will only deteriorate. What we should do is carefully analyze their needs and provide the proper assistance to help them forge stronger economies," Jin added.

China is fully committed to the debt relief plan of the Group of 20 (G20) to provide assistance to low-income countries affected by COVID-19. It has provided the largest amount of debt relief among G20 members.

"In dealing with debt problems, we need to take into account the interests and concerns of both the debtors and creditors. Sustainable financing is not free assistance or social welfare assistance," Hu Xiaolian, Chairman of the Export-Import Bank of China, said. "From the perspective of the incentive and restraint mechanism for the effective allocation of funds, the general usage efficiency of free funds is not high. While the relatively low-cost financing that the host country can bear not only absorbs more capital, it also promotes the more effective use thereof."

Debt relief is neither debt reduction nor exemption. Nations should in no manner use the debt issue to provoke conflict between China and other developing countries, and in doing so harm China's interests, Hu continued.

Moreover, once debt reduction or exemption has occurred, the international rating organizations will downgrade the debtor country's credit ratings. Going forward, this will complicate the process of borrowing money for these low-income countries, as well as exacerbate the difficulties of domestic financing, Zhou Xiaochuan, former Governor of the People's Bank of China, said.

Qian agreed with Zhou and reiterated the debt issue should be addressed through development. "Moving forward, China will further emphasize those projects that produce cash flow, including recent earnings, so as to help host countries to increase financial and foreign exchange income, improve their ability to pay off any debts, and promote sustainable development," Qian said.

 

An open China 

"Openness is essential for development and progress. It also holds the key to post-COVID-19 economic recovery," Xi added. "We need to promote trade and investment liberalization and facilitation, deepen regional economic integration, and enhance supply, industrial, data and human resource chains, with a view to building an open world economy."

China's domestic market will continue to swell. "During the 14th Five-Year Plan (2021-25) period, China will possibly overtake the U.S. to become the country with the largest commodity consumption in the world. Moreover, its trade in services, too, is set to flourish rapidly, projected to amount to 20 percent of its overall trade volume by the end of the period, up from less than 15 percent in 2020," Chi Fulin, President of the China Institute for Reform and Development, said. With steady steps toward more openness, this process will provide companies worldwide with greater opportunities for development.

China's market welcomes not only Chinese companies, but businesses from around the world, Chi said.

(Reporting from Boao, Hainan)

(Print Edition Title: Pulling Together Through Adversity)

Copyedited by Elsbeth van Paridon

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