The first Renmin University of China World Economic Forum is held on May 30.

 

Global economic development is complex and faces the challenge of restructuring, scholars said at the first Renmin University of China World Economic Forum themed “World Economy: Exploring a New Growth Path” held on May 30.

Complex situation
Chen Yulu, president of Renmin University, said that the development of the international division of labor integrates all countries into the world economy, increasing systemic risks. In particular, the effects of the 2008 global financial crisis still linger, Chen said.

“In 2014, the world economy changed greatly during its unsteady recovery,” he said. “Big gaps arose between emerging economies, represented by BRICS, and developed economies, represented by the US, the EU and Japan, bringing uncertainties to economic growth in the near future.”

Such factors as geopolitics and domestic politics pose challenges to the world economy, said Li Fenglin, former Chinese ambassador to Russia, citing how the US Congress blocked a proposal to reform the IMF. He added that the appearance of exclusive organizations is evidence of the constraints politics can place on economic development.

Free trade zone, innovation
Li said that we need to continue to devise new avenues for cooperation in new industrialization and international production capacity in particular. In addition to innovation in science and technology, institutional innovation will also play a key role, he said.
 

Tong Jiadong, vice-president of Nankai University, observed that free trade zones in China have provided a new platform and opportunity. He said Shanghai and Tianjin free trade zones have attracted a large sum of foreign capital due to the open environment for trade and investment. Furthermore, the pre-establishment national treatment and the “negative list” approach for foreign enterprises are all institutional innovations, he added.
 

Tong listed other innovations in building free trade zones, such as streamlined approval process, facilitated overseas contracts and reduced repayment pressure.
 

Enhancing fairness
At the meeting, scholars deemed it important to study the new order for the global economy.

According to the UN World Economic Situation and Prospects for 2015, the current global economy has a low level of growth, trade flow, inflation rate, investment and interest rate and a high level of stock price and debt. In such a context, developed and emerging economies need to take decisive measures to accelerate the structural adjustment, Chen said. “Restructuring can offset the weakness exposed during the crisis. Emerging economies in particular need to impel infrastructure construction, improve business conditions and increase productivity in order to boost economic growth.”
 

Zhang said that technology, human resources, mobility of factors, and global trade and investment systems are the four engines for long-term economic growth. The international system plays a unique role because it can directly or indirectly affect the other three aspects.
 

“The WTO now faces many obstacles while regional trade negotiations are overactive, increasingly fragmenting the global trade system. The main reason is that some nations pay attention to their own interests at the expense of global interests,” Zhang said. “Some nations take advantage of the establishment of international rules to contain rivals and prefer non-neutral systems to seek self-interest. And it should be noted that the victory of state competition relies on not only strength but also competition rules.”
 

Chen said that the Chinese economy is at a critical juncture of the “superposition of three periods,” namely, the transition period of growth rate, the throes of structural adjustment and the digestion period of previous stimulus packages. He added, the original driving forces are weakening, and the task of reducing excessive capacity, removing bubbles and relying less on leverage will remain the focus of the 13th Five-Year Plan (2016-2020).
 

In addition, China’s innovative cooperation models, such as the initiative of the “One Belt, One Road” can help enhance the fairness of world trade rules, he said.