Wang Huiyao: Rising to challenges
May 14 , 2020
By Wang Huiyao | President of
the Center for China and Globalization(CCG)
Countries must work together to reform and innovate global government system
The novel coronavirus has become a catalyst for change. Shocking death tolls and severe economic headwinds have compelled countries and world leaders to reflect on the state of our multilateral institutions.
We have found that the United Nations, the central postwar global institution tasked with maintaining peace and sustainable development for humankind, has been limited in its capacity to shape efforts to cope with the global pandemic. After 75 years, the UN has become stuck in a difficult situation from which it is hard to reform the organization. This deadlock has compromised the UN’s ability to deal with 21st-century challenges, in turn undermining its authority.
For example, the World Health Organization, the specialized agency of the UN responsible for international public health, should have been the core institution to coordinate international efforts to fight the pandemic. However, in some areas, it has lacked the power to galvanize a unified response and mobilize global resources. What is worse, some now seek to make the WHO a scapegoat on which to pin blame for the crisis.
The international free trade system has also come under fire. There are signs that the pandemic will spur trade protectionism. While it is understandable that countries may want to safeguard domestic supplies of essential goods such as medical equipment and food by using export restrictions, we should ensure this does not slide into more long-term and harmful forms of protectionism. It is important to remember that trade will serve as a key engine for the post-pandemic recovery of the world economy. This highlights the need for countries to work together to strengthen the free trade system by continuing to lower tariffs and non-tariff barriers.
Among all the economic issues that we are facing, the fragility of global value chains is one of the most prominent. Through globalization over the last few decades, global value chains have become ties linking countries together. This development has been supported by international trade rules and generated benefits for both developed and developing countries around the globe.
Now, with the rising anti-globalization sentiment and calls to restore key productive activities, the pandemic has exacerbated the pressure on global value chains. Serious decoupling is unlikely and unfeasible due to the deep and complex linkages that bind countries together. Shifting factories back home would incur high costs at a time of economic difficulty. Nevertheless, we do need to find ways to strike a balance between costs and potential risks to ensure that the global value chains are resilient and inclusive and generate wealth for all. One possible outcome is an acceleration of regional integration.
Despite the difficulties outlined above, the novel coronavirus also offers an unparalleled opportunity for countries to work together to innovate global governance, which had already fallen behind global realities long before the novel coronavirus outbreak.
Faced with the current challenges, the international community should be more active in multilateral cooperation and put forward ways to innovate the global governance system and institutions. For example, we need to advance reform of the World Trade Organization to protect and promote international free trade. There is also a need for new international organizations and institutions to respond to new issues regarding transborder talent flows, technology exchanges and the regulation of international enterprises.
In the short term, multilateral institutions such as the G20 should play a bigger role in the post-pandemic economy recovery. The International Monetary Fund projects that world GDP will contract 3 percent in 2020 and the WTO predicts that the world trade volume may decrease by around one-fifth. The economic slowdown we are facing will be worse than that seen in the wake of the 2008 financial crisis. Like then, our current situation calls for concerted international action to ensure a timely and robust recovery. To this end, the G20 should be allowed to play a greater coordinating role so that the efforts of national governments are coordinated and mutually reinforcing. For example, the G20 could set up a secretariat to coordinate members and shape meeting agendas.
The Belt and Road Initiative can be a further shot in the arm for global governance and post-pandemic recovery. Encouraging more countries to participate in the Belt and Road Initiative would enable the initiative to evolve into a more comprehensive multilateral mode of cooperation. Regarding investment, on top of infrastructure construction such as building roads, railways and ports, “new infrastructure” projects could also be a potential area to promote international cooperation. This endeavor should also include multilateral organizations such as the Asian Infrastructure Investment Bank, the World Bank and other development banks.
Last but not least, we should not lose sight of the other looming transnational challenges we face, such as climate change and environmental degradation. While these concerns have been overshadowed by the pandemic, the threat from environmental change remains severe. Plus, environmental degradation is also linked to the risk of further pandemics via habitat change and other mechanisms. Enhancing global cooperation on climate change and environmental problems will help lower the risk of future pandemics.
Despite the pains and challenges brought by the COVID-19, there remains hope for future global development if countries can nurture a spirit of cooperation. With its growing international role, China has the ability and responsibility to contribute to and lead reform of global governance, so we can come out of the current crisis and forge a more inclusive and balanced form of globalization.
