Belt and Road boosting economic globalization

The hope is, through connectivity of policies, infrastructure, trade, capital and culture, participating countries can work together better

Information technology, such as computers and the internet, have helped reduce the barriers of time and space, making the world more closely connected and speeding up globalization. Countries' economic and social development are also now closely related.

The world is experiencing changes as the United States' deglobalization approach and China's globalization policies and practices are having a huge influence on the global economy.

The 2008 global recession showed that the international economic and monetary order has big flaws. The global financial system that was dominated by the developed countries triggered huge financial asset bubbles. The benefits of economic globalization have reached only certain groups of people and are not shared by the whole world. In addition, global economy and trade have reached troughs.

Meanwhile, the new technology reform, represented by technologies such as big data, cloud computing and artificial intelligence, has already begun. Based on these new technologies, restructuring of the global industrial chain and development of global economic cooperation are underway.

Global economic cooperation is at a crossroads. At this crucial time, China has put forward plans to push ahead economic globalization through the Belt and Road Initiative.

The hope is that the BRI, through the connectivity of policies, infrastructure, trade, capital and culture, will help all participating countries use their own advantages to work together better. It aims for the mutual prosperity of developing and developed countries alike. The practice in the five years since the BRI was proposed has shown that China's plan caters to the wishes of people in most countries in the world, and so the BRI has won extensive support.

Countries involved in the BRI that hope to participate in the new international industrial specialization need to strengthen financial cooperation and work out financial support systems. They should make efforts in four areas and create a new kind of international financial cooperation system.

First, organizations like the Asian Infrastructure Investment Bank should be used to push countries to make efforts toward financial cooperation policy, mainly supporting such construction as transportation, electricity and telecommunication infrastructure.

Second, based on the Silk Road Fund, the governmental funds of countries involved in the BRI should jointly support the application of new technologies and increase value-added production.

Third, the cooperation of unofficial financial platforms should be strengthened, such as by establishing a multinational consortium of banks, and standards should be worked out in such areas as financial technology development, risk management and a payment and clearing system, to uplift the ability of finance to serve the real economy.

The fourth area where effort is needed is in pushing forward the reform of the international monetary system and increasing the use of the yuan in international trade, transactions and official reserves, to reduce the weaknesses and risks of the world financial system.

The author is deputy director of the International Monetary Institute of Renmin University of China, and professor of the university's School of Finance. The views do not necessarily reflect those of China Daily.

(China Daily Africa Weekly 10/26/2018 page9)