MercoPress. South Atlantic News Agency

China’s constructive role in global economic and financial affairs

By Dr. Ye Yu, Assistant Director of the Institute for Comparative Studies affiliated to the Shanghai Institute for International Studies (Special for People's Daily Online).The Group of Twenty (G-20) Summit (*) has opened a new page in the management of global economy and financial system, and China has played an important positive and constructive role since the First G20 Summit was held in Washington D.C. in November 2008.

At the 2008 G-20 Washington Summit, China proposed the correct orientation for the reform of the global financial system, namely, the reform should adhere to the goal for building a new international financial order that is fair, just, inclusive and orderly. The nation also proposed that the reform be conducted in a comprehensive, balanced, incremental and pragmatic manner in an endeavour to build a setup environment for the healthy growth of world economy.

Based on those considerations, China then suggested four main reform measures -- stepping up international cooperation in financial regulation; advancing the reform of global financial institutions; encouraging regional financial cooperation; and improving the international currency system.

China has made substantial efforts to spur the G-20 leaders to reach consensuses and resort to an efficient, strong support on a global scale to cope with the financial crisis. China has taken prompt and effective measures and the Chinese government timely implements comprehensive financial and monetary policies. China's 2008-2009 four-trillion Yuan (or 586 billion US dollars) stimulus package, which was designed to be used in infrastructure and social welfare by the end of 2010, has played a very positive role in contributing to global economic recovery at an early date.

Despite immense economic difficulties it has encountered in the crisis, China actively responds to the call for enhancing the assistance capacity of international financial institutions. China has, since December 2008, signed currency swap agreements with seven of its trading partners, including Argentina, Belarus, Brazil, Hong Kong and Indonesia, to help cushion their potential negative effect of the global financial crisis. As an important member of the world trade system, China has been working resolutely to resist trade protectionism, which is on rise during the crisis.

China's propositions and actions signify a new phase for the country's involvement in the global economic management, and it is of a positive significance in stimulating the world economic recovery and affecting a shift of the global economic system. In the field of coordinating international economic affairs, it is of a milestone importance to take views enunciated by leaders of China and other developing countries, and this shows the nation's status and influences have been shifted to a qualitative change from a quantitative change.

At the G-20 summit, China has firmly safeguarded the core national interests and its efforts have been playing a constructive role in helping to build a more stable global financial system toward the direction that is more fair and just. China has exerted itself to increasing the voice and representation of developing countries on the reform of international financial institutions and to spurring global currency multiplication on the one hand and, on the other hand, Chinese leaders have repeatedly called for mitigating damages or harms the global financial crisis inflicted upon the developing world and especially the least developed countries (LDGs).

When the global economic situation is turning better and more stable, the G-20 summit is facing the issue of a motive force and policy directions for the long-term sustainable development. As the largest emerging market economy, China continues to play a constructive role in defending the interests of developing countries. The G-20 summit still has a lot to do or to improve however, though it has been defined as the main platform for international economic cooperation.

Only by fixing its regulatory system or mechanism, can the G-20 summit better protect the rights and interest of developing countries from a perspective of structural mechanism, whereas various topics under discussion should be penetrated for breakthrough, so as to safeguard the interests of developing countries. Nevertheless, it is a prolonged process to deepen and implement the agenda.

To date, G-20 leaders have focused mainly on how to cope with the global financial crisis, and they should in fact broaden their focus to include the development issue in developing countries. Therefore, the emphasis on the issue of development or recovery effort would comply all the more with the interests of the developing countries.

(*) June 26/27 Toronto, Canada, hosts the G20 Summit under the theme: “Recovery and New Beginnings”.