BRI NEWS Interview: Asia-Pacific economies to define global economy's future

BRI NEWS

Interview: Asia-Pacific economies to define global economy's future

By Yu Yichun | People's Daily app

20:27, November 07, 2017

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(Photo: provided to People's Daily)

Hanoi (People's Daily) - Eduardo Pedrosa, the secretary general of the Pacific Economic Cooperation Council (PECC), said Asia-Pacific economies hold the future of the global economy.

"APEC can send a clear message on the importance of globalization to future growth and prosperity. One particular issue APEC could try to address is how regional efforts such as APEC support global integration,” Pedrosa told the People's Daily in an interview on November 7, 2017. 

Pedrosa said that as the world's largest emerging economy, China's most important contribution would be to continue its own economic reforms to make it a more market-oriented economy, and the 19th CPC National Congress sent a strong signal that China would continue its opening up and reform process.

The following is the full interview. 

PD: What do you think of the theme CREATING NEW DYNAMISM, FOSTERING A SHARED FUTURE and the agenda of the Da Nang APEC summit? What are your expectations from the summit?

Pedrosa: Regional growth has been on a lower trajectory since the global financial crisis, and the theme focuses policy attention on the need to find new growth engines. The idea of a shared future emphasizes how future prosperity is interdependent.  APEC officials have been working through the year on some long-term objectives such as the FTAAP, and the APEC Services Competitiveness Roadmap. Some key deliverables this year would refine regional thinking on how to collectively respond to the internet and digital economy.

PD: How important is mutual trust, inclusive, cooperative and win-win Asia-pacific partnership to the region and the world? 

Pedrosa: The relationships among Asia-Pacific economies will define the future of the global economy. The challenges are vast as we enter into the 4th industrial revolution. Relatively little work has been done on the underlying policies that underpin the digital economy. For example, defining the status of platforms like Alibaba and Amazon, the role of artificial intelligence, and so on. 

There is a risk that globally, the market will not integrate but fragment as economies around the world implement policies on issues such as data privacy and security in response to cyber security threats like Ransomware and WannaCry. The Asia-Pacific can help to define global norms that respect local circumstances but keep markets open and minimize compliance costs – especially for micro and small and medium enterprises.

PD: With the rising trend of de-globalization and protectionism, the APEC summit could have a role in stressing the importance of a free global trading regime to the world. What could be China's contribution? What do you think of China's efforts made so far? 

Pedrosa: APEC can send a clear message on the importance of globalization to future growth and prosperity.  One particular issue APEC could try to address is how regional efforts such as APEC support global integration. I think one critical challenge will be what happens to the Regional Comprehensive Economic Partnership (RCEP). To bring RCEP to a successful conclusion would send a very strong message against protectionism.

As the world's largest emerging economy, China's most important contribution would be to continue its own economic reforms to make it a more market-oriented economy. China's success over the past few decades has been focused on investment. As it shifts towards a more consumption based economy, it will create more opportunities for Chinese and foreign businesses alike. 

The 19th Party Congress sent a strong signal that China would continue its opening up and reform process. The APEC leaders' meeting will be Chinese President Xi's first overseas trip since then and will provide an opportunity to further articulate the international dimensions of China's policy direction over the next few years.

PD: Global economic recovery still faces uncertainties, while Asia-Pacific development has entered a new phase. In your opinion, what could Asia-Pacific economies do to promote economic development and deepen economic reform and pursue new growth engines, thus continuing leading global economic growth? What do you think of China's current economic growth and China's efforts to push the economic structure?  What could be China's contribution to the region in maintaining the economic growth momentum?

Pedrosa: A successful RCEP is critical to encouraging further reforms and unlocking growth potential. However, it needs to  be complemented by strong supply-side reforms – education, infrastructure. China's steady progress has been very impressive, there is a large potential for outbound investment – especially in infrastructure in which China has leapfrogged generations. Building for the future rather than just yesterday's needs comes with risks of oversupply that need to be addressed. 

A key metric of China's success in the coming years will be the ability to shift from investment- and export-driven growth to more consumption and services-driven growth. As that process unfolds, China's contribution to the regional momentum would be to have a market open to others – it would help keep China's own corporate sector competitive and avoid a misallocation of resources.

PD: APEC has been successful in promoting infrastructure development and connectivity. What do you suggest to break bottlenecks to further driving the regional integral development in infrastructure and connectivity? What kind of role could the China-proposed Belt and Road initiative play?

Pedrosa: While infrastructure needs are high, there is a lot of money available for projects but the policy environment remains risky leading to high interest rates and imbalanced risk-return ratios. In addition to project funding, there needs to be capacity building for stronger institutions to undertake such projects. These projects cannot be unproductive. They need to focus on the real needs of people and meet market demands.

PD: SMEs are an important part of Asia-Pacific economies. How would SMEs further facilitate trading across borders and promote inclusive growth? What do you think of China's efforts to help SMEs grow? 

Pedrosa: We should focus on the supply side to help micro and small and medium enterprises get products to consumers. This includes making government regulations more transparent and predictable as well as reducing physical transportation costs. Platforms like Alibaba enable SMEs to match their products with consumers.  It's been a successful model. 


Background of PECC: Established in 1980, it's the only non-government official observer of APEC, and serves as a regional forum for cooperation and policy coordination to promote economic development in the Asia-Pacific region.

PECC now has 26 member committees, including one associate member, and two institutional members. Each member committee brings together leading thinkers and decision-makers from government and business in an informal setting to discuss and formulate ideas on the most significant challenges facing the Asia-Pacific region.

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