Solidarity Is Crucial to Revive the Global Economy

By Lily Wang

On May 29， the Interna- tional Financial Forum（IFF） 2021 Spring Meeting commenced in Beijing. The theme of this conference is “The post-pandemic era： global governance and international cooperation”. The opening ceremony was presided over by Gao Yan， Chairperson of the CCPIT.

Join hands to tackle challenges

Zhou Xiaochuan， President of the IFF conference and Deputy Chairman of the 12th CPPCC， said in his opening speech that amidst the global spread of the COVID-19 pandemic and unforeseen global changes in the last century， peoples living and development have been facing severe challenges. This years conference focuses on global governance and international cooperation in the post-pandemic era. He said that due to the impact of the COVID-19 pandemic， debt risks of some developing countries have increased. Last year the G20 proposed to postpone debt repayment of the most impoverished countries and establish a common framework for the arrangement of outstanding debt， to alleviate debt problems caused by the COVID-19 pandemic. China has allocated more than USD 1.3 billion in debt relief， making it the largest country among G20 countries in terms of the amount of debt relief. At the moment， China is speeding up the construction of a new development pattern with domestic circulation as the mainstay and domestic and international circulations promoting each other. China will continue to be the “world factory” and “world market”， and expand its opening-up while increasing domestic demand. Chinas sustained development and opening-up will aid the recovery of the world economy.

UN secretary-general António Guterres said that the COVID-19 pandemic has subverted peoples lives and affected the process of achieving sustainable development goals in 2030. In order to effectively cope with the impact of the pandemic， it is imperative to narrow the gap in global vaccine inoculation and provide more support to developing countries on the verge of debt crisis. Developed countries should fulfill their commitment of aid and climate financing， promote the early recovery of the world economy， and effectively deal with the global climate crisis.

IMF managing Director Kristalina Georgieva said that world economic recovery has seen dangerous polarization. The global policy-makers shall provide equal opportunities for each person in vaccinations， economic recovery and future development. Chinas efforts to promote global cooperation in fighting the pandemic will be appreciated. The IMF has uplifted Chinas economic growth forecast to 8.4% and estimated that by 2026， China will contribute more than a quarter of global GDP growth. On top of that， Chinas commitment to achieve zero emission by 2026 has demonstrated its responsibility as a great country， and reflects the global consensus in this area. Developing green infrastructural investment will be conducive to the economic transition bearing in mind climate， and also the promotion of global economic growth and the creation of more jobs.

José Manuel Barroso， Chair of the GAVI （Global Alliance for Vaccines and Immunization） and former Prime Minister of Portugal， said that public health safety is a global public good. All countries shall input more human， commodity， capital and R&D resources to prevent global pandemics in the future. It is important to promote global balance in the distribution of vaccines. Developed countries shall offer support to countries and regions incapable of coping with challenges from the pandemic. Faced with issues like the COVID-19 pandemic， global climate change and financial stability， the international society shall work together， enhance mutual understanding and trust as well as tackle challenges in the spirit of multilateralism.

Hank Paulson， former U.S. Treasury Secretary and founder and Chairman of Paulson Institute， said that the relationship between China and the U.S. is the worlds most important bilateral relation. It is important to avoid conflict and promote sound competition， which caters to the interests of both countries. China and the U.S. shall work more closely in coping with climate change， reducing tariff barriers， promoting the free flow of environmental products and services， developing clean technology and studying the methods and measures in the pricing of natural resources.

CCPIT Deputy Chairman Chen Jianan said in an interview that it is important to nurture the Chinese corporate team to engage in global economic governance. It is also imperative to organize more Chinese companies to deeply engage in G20， APEC， BRICS and other business events under the framework of multilateralism， to promote economic globalization towards more openness， inclusiveness， general benefits， balance and a global win-win situation. Chinas sustainable development and openness will inject stronger impetus into world economic recovery and growth， and provide more historical opportunities and wider space for the cooperation of the global business community.

Fill in the gap in fighting the pandemic

In the face of the severely uneven distribution of vaccines， what shall the world do？ How do we establish and improve the national cooperation mechanism for global public health safety in the future？

Zhang Yuhui， Deputy Director of the health development research center of the National Health Commission， said that although the COVID-19 vaccine has been successfully developed and many countries have explored effective methods to control the virus， global pandemic prevention and control still face challenges， such as virus mutation， early deregulation in many countries and the uneven distribution of vaccines.

Zhang Yuhui said that these challenges reflect the shortcomings of the global health governance mechanism. The successful control of the pandemic in the next several months will be impossible if there is no improved global cooperation.

Zhang Yuhui cited the IMF forecast data that in 2020 and 2021， the COVID-19 pandemic caused a global GDP loss of more than USD 12 trillion. This is almost 6 to 7 times the total loss of all infectious diseases in the past decade.

In terms of promoting sustainable health， Ennis Baris， senior global health advisor of the New Development Bank， believes that to build a world community of human health， it is very important to maintain pragmatic cooperation. We shall support the World Health Organization， which plays a key role in the world health.

“We need to establish a global platform and mechanism to ensure efficient distribution of vaccines and other public goods，” Ennis Baris said.

Zhuang Juzhong， chief economist of the IFF and former deputy chief economist of the Asian Development Bank， pointed out， “we need a global mechanism to ensure that[vaccine] prices are affordable for developing countries and sustainable for producers. We need to build joint ventures in developing countries to produce vaccines.”

Dong Xiaoping， chief virologist of the China CDC， also said that in addition to vaccines， we should not forget about non-medical interventions. For example， people shall work together to ensure hand washing and wearing masks to become the new normal in the post-pandemic era.

“We shall work together in both professional， social and governmental fields，” said Dong Xiaoping.

Regarding cooperation in innovative R&D， Alexander Padillo， Brazil congressman and ex-health minister， praised Chinas help to Brazil. He said that about 80% vaccines offered to Brazilian people resulted from cooperation between the Chinese government， enterprises and Brazils vaccine producers.

Zhuang Juzhong believes that in the short and medium term， each country and nation needs to share their own vaccine reserves to help less-developed countries. In the long run， there are some measures that need to be considered to overcome this vaccine gap. For example， it is necessary to give up the intellectual property rights of the COVID-19 vaccine， at least during this pandemic. In this way， more manufacturers will be able to produce vaccines， and an adequate supply can reduce the cost of vaccines.

At the same time， Zhuang Juzhong stressed that low-income countries need to expand investment in infrastructure and strengthen management. They need more support from multilateral development financial institutions such as the World Bank， the Asian Development Bank， the Asian Investment Bank and the Development Bank.

In terms of maintaining global health and safety， Han Seung-soo， Co-chairman of the IFF， President of the 56th UN General Assembly and former Prime Minister of South Korea， said that human society was undergoing profound transformation during the fourth industrial revolution. The emergence of the COVID-19 virus at this time enables all countries to apply new technologies and more scientific and effective methods to deal with the pandemic.

Jenny Shipley， Director of the IFF and former Prime Minister of New Zealand， also mentioned the necessity of creating a vaccine passport in the future. For example， people without vaccine inoculation shall not be allowed to board certain airlines flights or enter the border of a country. In this way， more strategies need to be employed until the vaccination rate has reached an effective level globally.

Heated discussion on digital currency

During the IFF forum， many experts of the industry held heated discussions about digital currency.

Yao Qian， Director of the Science and Technology Supervision Bureau of the China Securities Regulatory Commission， believes that in the face of digitalization， it is necessary for the central bank to actively innovate ways of the issuance and circulation of legal tender， explore the central banks digital currency， optimize the payment function of legal tender， alleviate the impact of private payment instruments， and improve the status of legal tender and the effectiveness of monetary policy. As the Chinese people have become accustomed to non-cash payment methods such as Alipay and QQ music， many people no longer carry cash. In fact， third party payment technology has already been able to realize the transparency of all real-time transactions.

However， it has also caused problems such as data privacy protection， anonymity， monopoly， regulatory transparency and so on.

He Ping， Director of the Department of Finance， School of Economic Management， Tsinghua University， said that central bank digital currency features advanced technology and is able to help the whole economy realize fast digital transformation. However， we still need more top-level design in its application scenario， the cooperation with other means of payment， and the position and competition in the international payment system.

Nie Qingping， Chairman of China Securities Finance Corporation Ltd.， said that virtual currency belongs to securities assets. Only the central banks legal digital currency represents a change in payment methods.

Yao Qian pointed out that the R&D of the central banks digital currency should be considered from many aspects， such as the technical route， whether the operation structure is double-layer or single-layer， whether interest is calculated， the issuance mode， and the smart contract.

Take the smart contract as an example. Previously， there was a view that adding smart contracts would affect the legal compensation function of flat money. Therefore， it is suggested that the central bank should be cautious about adding smart contracts to digital currency.

Yao Qian said that the central bank digital currency research projects carried out by the central banks of Canada， Singapore， Europe and Japan have all realized smart contracts. “The digital currency of the central bank is not a simple simulation of the physical currency. If we want to give full play to the digital advantage， the digital currency of the central bank must move towards smart currency in the future.”

In He Pings view， intelligent technologies may not be deeply implemented in the central banks digital currency in the future. Commercial banks and third-party payment institutions will have more advantages and motivation in this area.