IFF co-chairman, former chairman of the European Commission, former Portuguese Prime Minister Barroso
The era we live in is a special era. Although the world has already experienced a revolution in globalization, the scale of the new round of globalization is unprecedented, the intensity and speed are unprecedented. The rapid development of China's economy is an excellent example of economic globalization. At one time, globalization only connected the world like the industrial revolution. Now, the intensity and speed of global integration is much higher than before.
The financial crisis that broke out in 2007 and 2008 has not disappeared. The bankruptcy of Lehman Brothers is the fuse of the crisis, but it is not the only cause of the crisis. The financial crisis has also had a huge impact on Europe, which we call financial and sovereign debt crises. In this context, we realize that we must deal with globalization from the perspective of mechanism building. So, the G20 was born.
At that time, the G20 summit was only an exchange between finance ministers, and not all government heads of government would participate. The G20 summit originated in Europe. At that time, I joined the President of the European Council and the President of France, and invited the President of the United States to hold the first G20 Summit in Washington. As a result, the G20 Summit has established itself as the world's highest economic forum. Since then, the G20 Summit has been held every year. The G20 summit has become so important because we know that the G8 has been unable to coordinate globally unified actions in the face of challenges.
Members of the G20 not only included all the members of the previous G8 summit, but also included China and other important economies in the world. Therefore, the annual G20 summit is dedicated to coordinating actions in countries around the world.
Before leaving the European Commission in 2014, I had the privilege of attending each of the previous G20 summits. The convening of the G20 summit is significant, and it can prevent countries from returning to trade protectionism again, as it was in the 1940s.
During the financial crisis, trade protectionism became increasingly serious, but after the financial crisis, comprehensive trade protectionism did not immediately rise to the full and formed a severe situation.
To a large extent, this should be attributed to the role played by the G20 Summit in coordinating leaders' unified actions. The G20 has made the financial system more stable and has established a Financial Stability Board for this purpose. Such a system is designed to provide a global framework for sustainable development. Although it is not perfect now, it still has reference.
The G20 Summit provides a time and platform for coordination and cooperation. For the first time, heads of government who came from all over the world could sit down and talk freely, instead of reading the prepared speeches. Their topic is how to prevent further deterioration of the financial crisis and what actions to take to protect economic growth. At that time, Europe deeply felt the impact of the crisis, and even once doubted whether the establishment of the euro zone was correct. Fortunately, the G20 led everyone to find the right answer.
China has made unremitting efforts in maintaining the financial stability of the EU and the Eurozone. The G20 had the highest level of dialogue with the Chinese government at the time, including direct exchanges with the People's Bank of China. The outcome of the talks was significant. Today, thanks to China again, it is not just for etiquette, but because it feels China's efforts for the sustainable development of the global economy.
Is the current G20 summit still inherited the spirit of the time? It is a pity that the spirit of the summit is very different from the past. In Europe, and even the world's populism has come back – sometimes called “nationalism” because it always emphasizes its national priority, but we forget that today is a connected world. Nationalism and protectionism, as well as escalating tensions, are happening before our eyes. How should we deal with these crises?
The solution to these crises lies in groundbreaking ideas and long-term plans and infrastructure. Groundbreaking ideas must be based on multilateral governance. Countries should unite to maintain mechanisms for multilateral governance and oppose unilateralism and bilateralism.
The problems of unilateralism and bilateralism have been in existence for a long time. Previously, the dollar development negotiations ended in failure. At that time, the international community did not accept the global trade agreement because some members were not ready. The problem now is not only the conclusion of bilateral agreements, but sometimes even bilateral trade agreements cannot continue.
So we need a multilateral platform to establish a stable multilateral order, which also means that order must be based on a set of accepted rules that can be observed and enforced. From this perspective, I am worried about the status quo of the WTO. Because the WTO is in a dangerous state, we lack the necessary support for its practice institutions, which will not help resolve disputes between member states.
Not only do we need to strengthen the global governance mechanisms of the international community, but we also need to urge the implementation of national governance mechanisms, because the two are closely linked. Ignoring the domestic governance system—such as governing the country by law—just blames the failure of the governance system on the absence of a fair market environment, and trying to solve the global governance mechanism is a delusion.
In the international community, competition is inevitable. The question is, will competition between countries be carried out in a predictable and stable system? Or will we see the country's mutual roll in the context of global confrontation?
All those who insist on the principle of openness should strive for a stable system based on rules, a system that makes our decisions predictable and allows us to operate in a stable framework. This is also an important reason for supporting the United Nations, the International Monetary Fund, the WTO and other multilateral institutions and multilateral mechanisms.
Second, we should also strive to increase connectivity and build the necessary infrastructure. We should not only support the infrastructure construction in transportation and digitization, but also continuously strengthen the construction of world contacts. I think this is the general trend.
However, the current development of the international economy has been at a very special moment in history because the past mechanisms have failed, but the new framework and new order have not yet arrived. So we are in a transitional phase. The transition itself will have some doubts, and it will produce some uncertainty, some unknowns, which is very natural.
The current international order is also in an uncertain state. Perhaps the biggest risk of global growth today is the lack of these predictable rules and predictable systems. At present, anxiety and uncertainty have caused suspicion from business and investors, so the spread of pessimism will also affect the sustainability of development.
Finally, we must decide if you want to live in a world that follows the rules. This is not only a political issue, but even a broader cultural issue – will we support openness or stand on the opposite side of openness? From my personal standpoint, I insist on an open attitude and the EU still adheres to an open attitude.
In the future order, China has to play a vital role. Of course, the role of China is determined by China itself. Now, at the 40th anniversary of China's reform and opening up, as an external observer, I believe that China's structural growth prospects depend on whether it can implement market-oriented reforms. China’s commitment to reform has driven long-term economic growth, and China’s growth is important to China and the global economy. Therefore, from the perspective of Europe, or from my personal point of view, I call on China to continue reform and opening up, including the opening up of foreign companies, especially the financial industry can further open up to overseas enterprises, which will help create and improve a fair competition platform. Promote development, business and a stable global order.
So even though it seems that globalization is experiencing some twists and turns, on the one hand, the flow of goods and services, as well as cross-border tourism, communication, interpersonal communication, culture, and scientific and technological exchanges continue, on the other hand, friction and resistance still exist. We should face these issues frankly and firmly believe that the stronger trend in the future is a more global and more interconnected world.
From climate change to financial instability, to trade frictions, international terrorism, and epidemics, these important issues are also inseparable from globalization, which requires us to have solutions and mechanisms that transcend national borders. We can't look at these problems in a split manner. We must know the truth of the cold and the cold, and help each other.
That is why we need to adopt global solutions to create the necessary stability for trade, investment and sustainable growth. Of course, let us not forget that the least developed countries in the world need the support of more advanced major economies to develop, because a world full of hope should be not only a peaceful world but also a world based on justice.