As the COVID-19 pandemic is still sweeping through the globe, with the Asia and Pacific region hit hard by the contagion, growth uncertainties are clouding economies to varying degrees.
Economic activity in the Asia and Pacific is expected to contract by 2.3 percent in 2020, and to grow by 6.7 percent in 2021, compared to a contraction of 5.8 percent in 2020 and a growth of 3.9 percent in 2021 for advanced economies, according to the International Monetary Fund (IMF).
China, whose economy saw positive overall growth in the first three quarters this year, shared its vision for continuing to foster domestic economic recovery and mutual beneficial cooperation with Asia-Pacific economies, as Chinese President Xi Jinping delivered a keynote speech at the Asia-Pacific Economic Cooperation (APEC) CEO Dialogues on Thursday via a video link in Beijing.
APEC, Asia-Pacific’s premier economic forum, was established in 1989 to leverage the region’s growing interdependence and boost regional prosperity through initiatives promoting free and open trade among member economies.
The Malaysia delegation of the APEC Business Advisory Council (ABAC) is hosting the forum for setting priorities in the aftermath of COVID-19, as Malaysia is the host of APEC this year.
Addressing leaders of Asia-Pacific’s business community, Xi said that China’s sound economic recovery has proven the resilience and vitality of the Chinese economy and he is confident that “steady unleashing of the China market potential will create vast business possibilities for other countries” and create stronger impetus for maintaining stable growth of the global economy.
Pursue innovation-driven growth
As science and technology have been playing an even more significant role in boosting social productivity, Xi said to achieve high-quality growth driven by domestic demand, China will vigorously boost scientific and technological innovations in the country.
He noted that innovation has always been the primary driver of development to China, and the country has made major achievements by implementing an innovation-driven development strategy.
“We will fully leverage the demand of our super-sized domestic market and the strengths of its complete industrial system and redouble efforts to turn research outcomes into real productivity,” the Chinese president said.
To sustain China’s long-term economic development, Xi added “we will endeavor to build an innovation system that integrates science and technology, education, industries and the financial sector, and upgrade the industrial chains.”
Nanshan district in the city of Shenzhen, Guangdong Province. /CGTN
Deepen reform and opening-up through mechanism improvements
The Chinese president also stressed that the country will continue to deepen reform and energize the market as reform is crucial for unleashing and boosting productivity.
The ratio of China’s foreign trade to GDP dropped from 67 percent in 2006 to less than 32 percent in 2019, while the ratio of current account surplus to GDP has come down from 9.9 percent in 2007 to less than 1 percent today.
In seven years since the 2008 global financial crisis, the contribution of China’s domestic demand to GDP exceeded 100 percent, making domestic consumption the main driver of its growth.
Xi said that China has entered a new stage of development with new tasks of reform, emphasizing that the country will be adopting a new “dual circulation” development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other.
However, by fostering a new development paradigm, Xi pointed out “we are not pursuing a closed-door circulation, but open and mutually reinforcing domestic and international circulations.”
In addition, the president added that China will take more steps to remove deep-seated systemic and institutional barriers to modernize China’s governance system and capacity along with some market restrictions, from strengthening protection of property and intellectual property rights, set up a high-standard market system to improve mechanisms for fair competition.
Hopes for the Asia-Pacific business community
The APEC’s 21 member economies together represent roughly 60 percent of the world economy and take up almost half of the world trade volume in 2018.
Xi highlighted that the Asia-Pacific business community is an engine driving economic growth, and it carries an important role of shaping the future of the region.
He expressed hope for the community as he suggested that the business sector should put its efforts in promoting open trade and investment as well as development, exploring ways to achieve innovation-driven growth, and cooperating with each other and lending hands of help to the disadvantaged if needed for maximizing development outcomes.
On Friday, Xi will be attending APEC Economic Leaders’ Meeting, which is expected to see the launch of the region’s Post-2020 Vision – the key policy document that is set to elaborate the goals and guidelines for APEC member economies’ future cooperation.
What We Learned From The 2020 G20 Riyadh Summit
The 2020 G20 Leaders’ Summit formally concluded on November 22, bringing into view a series of multilateral commitments and collective interventions aimed at breaking ground during the pandemic, and in its immediate aftermath – all for a world in need.
Leaders expressed their collective determination to strengthen COVID-19 vaccine distribution channels and production capacities, extend social protection guarantees to low-income countries, cement crucial debt-relief extensions, and communicate their “highest possible ambition” under the Paris Accord.
On the question of navigating the pandemic collectively, the G20 correctly indicates that the “unprecedented” financial and humanitarian costs can be best challenged through an even stronger focus on COVID-19 related health, economic, and social exigencies faced by developing countries at present.
More importantly, leaders render this diagnosis tangible by aligning their support with key collaborative efforts – notably the Access to COVID-19 Tools Accelerator (ACT-A) initiative and its COVAX facility – and zeroing in on swift, organized financial support for developing economies.
Nearly four dozen countries have already requested debt relief under the Debt Service Suspension Initiative (DSSI), equaling some $5.7 billion in critical debt service deferral for this year alone.
It is here that the G20’s latest decision to endorse “The Common Framework for Debt Treatments beyond the DSSI” extends relief timelines to mid-2021, consistent with the deteriorating economic outlooks of numerous low-income countries that may face challenges beyond a set timeline.
In a welcome move, finance officials from all 20 states will continue to monitor global economic behavior into the next year, and determine whether further extension of DSSI debt freeze merits consideration.
The logo of Group of Twenty (G20) being projected at a historic site in Diriyah, on the outskirts of Riyadh, Saudi Arabia, November 20, 2020. /Xinhua
Therefore, the G20’s demonstrated desire to internationalize economic recovery prospects, instead of confining them within its own territorial bounds, signifies its commitment to equitable global recovery.
Interestingly, part of that growth also owes to the effective and timely distribution of COVID-19 diagnostics, therapeutics and vaccines, as well as enduring partnerships that help prepare against future infectious and non-communicable diseases.
The G20’s embrace of its newly established Global Innovation Hub for Improving Value in Health is therefore a step in the right direction. The Hub serves as a dedicated platform for knowledge sharing that positions itself as a gateway for better Universal Health Coverage across countries.
It seeks to accomplish this goal by collecting evidence-informed expertise, and determine which health policies nations should fund, whether these health interventions reflect that country’s actual needs, and how financial risks to a given populace are best minimized.
Building on prior efforts of the World Health Organization (WHO), the Hub could play a key role in mainstreaming pandemic preparedness expertise and form a valuable front against future outbreaks.
Given pronounced contrasts between developed and developing countries in terms of income equality, education access, and living standards, it is only logical for the post-pandemic growth vision to identify as truly sustainable and inclusive.
G20 leaders offered an array of policy insights to realizing this ambition, including the sustainable integration of less developed economies into the global trading system – a point of reflection ahead of the World Trade Organization (WTO) reforms.
As far as a result-yielding framework for post-pandemic growth goes, Chinese President Xi Jinping demonstrated all-important focus on implementing the United Nations 2030 Agenda for Sustainable Development (SDG).
The agenda, significant to narrowing the “North-South gap,” does not necessarily limit headway on inclusive growth to the turn of the decade. China’s accelerated gains against absolute poverty – nearly a decade ahead of the 2030 Agenda schedule – is evidence that the conditions for achieving such sustainable growth can evolve with leadership imperatives, especially during the pandemic.
The G20 offered a clear conception of some of its own such imperatives, led by the 2020 Financial Inclusion Plan, which will serve as a catalyst for preexisting partnerships that help countries implement their financial inclusion SDGs for the next three years.
On climate, governments, civil societies, environmental activists, as well as broader coalitions for dedicated change may find plenty to seek comfort in. The G20 employed international cooperation as its lens to reiterate the disclosure of Member States’ “long-term low greenhouse gas emission development strategies” in 2020, and encouraged updates to countries’ highest possible “nationally determined contributions” under the Paris Accord.
By taking climate initiative into its own hands, the G20 dispels the notion that an external stimulus may be necessary to trigger progression on climate-aligned SDG commitments. Instead, the desire to commit to voluntary climate communication is a welcome departure from previous evidence that found G20’s climate commitments to be at relative odds with the emissions reductions goals set out under the Paris Accord.
A determined G20 alliance, therefore, can thrive on the back of clearly chalked-out priorities. Balancing resolve with instruments of delivery can end up accelerating the cause of a strong, sustainable, balanced, and inclusive post-COVID-19 era.
Xi Jinping At G20: Three Things To Do For Planet Earth
Chinese President Xi Jinping proposes three things for the Group of 20 (G20) nations to do in his speech via video link at the G20 summit side event about safeguarding the planet on Sunday.
Strengthening the response to climate change
Xi Jinping said the United Nations Framework Convention on Climate Change and the Paris Agreement should be respected.
“Not long ago, I announced China’s initiative to scale up its nationally determined contributions and strive to peak carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060,” Xi said. “China will honor its commitment and see the implementation through.”
Deepen the transition toward clean energy
Xi Jinping spoke highly of Saudi Arabia’s Circular Carbon Economy initiative. Then, he described China’s contribution to clean energy.
“China has put in place the world’s biggest clean energy system,” Xi said. “And [China] has led the world in the output and sales of new energy vehicles for five years running.”
Xi, who is also the General Secretary of the Chinese Communist Party (CCP), said the Party have recommended the country to “pursue clean, low-carbon, safe and efficient use of energy” and “accelerate the growth of new energy and green industries” for the next 15 years.
Protecting the ecosystem with a respect for nature
Xi expressed China’s support in reducing land degradation, conserving coral reefs, and cleaning up plastic from the ocean.
Xi welcomed all parties to the Convention on Biological Diversity to participate in the 15th meeting of the Conference of the Parties (COP 15) in China’s Kunming City in May 2021.
He hoped the meeting can “set goals and take actions to ensure the protection of global biodiversity in the years ahead.”
2020 APEC Meeting To Be A Hallmark Of Asia-Pacific Resilience
Malaysia is all set to host the 2020 APEC Economic Leader’s Meeting scheduled for November 20, which will be the first time that the leaders of the 21-member bloc will meet virtually on account of the COVID-19 pandemic.
The meeting comes at a critical juncture as it coincides with the 2020 G20 Riyadh summit taking place a day later and the signing of the landmark Regional Comprehensive Economic Partnership (RCEP) at the Hanoi virtual ASEAN Summit on the 15th of this month.
The upcoming meeting aims at further consolidating the Asia-Pacific’s significance as both an economic hub and a resilient region with a combination of high income, newly industrialized and developing countries all potentially benefiting from trade deals, regional connectivity prospects and joint prosperity for the future. The stakes are definitely high with plenty on the agenda.
The host Malaysia is a key economic player in the ASEAN region and has already hosted the first set of technical meetings in Putrajaya in February this year.
Kuala Lumpur also resorted to a digital format on account of the World Health Organization’s declaration that the COVID-19 quagmire was now a global pandemic.
Despite the devastating effects of the virus on the Asia-Pacific economies, the region has not shunned away from exploring prospects of economic revival, robust economic stimulus strategies and pioneering innovation to promote a business-friendly environment.
Furthermore, the region has remain unscathed from geopolitics, with the U.S.- China rivalry – due to undue provocations from the Trump administration in the South China Sea – failing to prevent ASEAN member states from pursuing non-partisanship as a policy in their relationships with Beijing and Washington, D.C.
The Malaysian venue of a virtual meeting of APEC Ministers Responsible for Trade, in Kuala Lumpur, Malaysia, July 25, 2020. /Xinhua
The focus of countries in the Pacific Rim such as Chile, Canada, Australia, New Zealand and even the United States would be to maintain APEC’s significance as one of the highest level multilateral blocs and oldest forums in the region.
To ensure APEC’s stature, economic leaders are expected to come up with a new vision that will act as the guiding principle of the platform’s work in the next few decades, including the ongoing COVID years. Malaysia’s theme is “Optimizing Human Potential Towards a Resilient Future of Shared Prosperity: Pivot, Prioritize, Progress.” The three Ps will be supplemented with efforts to implement the “Bogor Goals,” which carry historical significance.
In 1994, after the APEC meeting in the town of Bogor in Indonesia, it was announced that the year 2020 would be when the long-term objective of promoting free open trade and investments in the Asia-Pacific region was to materialize and become operational.
Since, then the Bogor Goals have become one of APEC’s flagship initiatives. The goals also make it incumbent upon member economies to reduce barriers to trade and investments and avert scenarios such as a region-wide drop in tariffs, which was witnessed in the 1980s.
In the lead-up to the meeting, the United States, as the most economically powerful member state of the bloc under the Trump administration, was involved in pernicious trade practices such as increasing tariffs with the aim of strangulating the Chinese economy, jeopardizing the entire objective of the Bogor Goals.
It is therefore necessary that this meeting ensures that members implement unilateral policies as well as negotiate bilateral, multilateral and regional agreements provided that they are consistent with the rules of the World Trade Organization.
The successful implementation of the Bogor Goals will become a testament to the worldwide commitment of APEC toward multilateralism as a solution to pressing economic issues of the modern era, which are largely related to the pandemic.
Many of the goals envisioned in 1994 were realized in the 2018 Bogor Goals Progress Report, which details how tariffs had fallen, free trade agreements improving market access were inked prior to RCEP, and customs reforms made it easier for free trade to take place unabated. However, there are areas which need improvement.
APEC members with large agricultural sectors have encountered higher tariffs, which have a direct impact on their current account balances. Similarly, non-tariff measures have also accumulated over the years alongside restrictions on foreign investments in service sectors.
While mitigating the effects of the pandemic on regional economies would be a top priority for APEC states, emphasis would also need to be placed on the few loopholes which remain as well as comprehensive implementation of the the Bogor Goals in both letter and spirit.
One of the main reasons why the 2020 APEC meeting holds much promise in consolidating the Asia-Pacific region’s status as an engine of growth is because most actions already taken for the past few decades have significantly benefited the region prior to the onset of the pandemic. Trade continuing unabated has resulted in a decline in poverty levels in member states such as China, Indonesia and Vietnam.
The number of citizens under the internationally recognized poverty line of less than $1.25 per day, prior to 2015 when it was revised to $1.90, has been reduced by half a billion since 1990.
Agility, inclusive economic growth with the result of shared prosperity, will most definitely define the Asia-Pacific region alongside exploring strategies of dealing with pandemic-stricken economies in the upcoming meeting.
All eyes would be on what will be inked down and agreed upon in yet another significant multilateral forum.
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