The Belt and Road Initiative (BRI) can be a new model for globalisation, as the current model is beginning to falter, said Li Yang, an expert in economics at the China Development Forum in Beijing.
Li, director-general of the National Institution for Finance and Development under the Chinese Academy of Social Sciences, pointed out that the world is currently in a stage of de-globalisation.
One typical example of this is the discrepancy between global trade growth and GDP growth. Data-wise, from 1960 to 2015, global trade grew at an average annual rate of 6.6 percent, and global GDP grew 3.5 percent annually.
From 2008 to 2015, trade grew at an average annual rate of 3.4 percent, and GDP grew at an average annual rate of 2.4 percent. Since 2011, global trade growth has fallen below 3 percent for five consecutive years, barely keeping up with GDP growth. The data indicates that global economies have begun to disconnect and the trend of de-globalisation has emerged.
De-globalisation is worrying, according to Li. The decline in the trade growth rate will lead to a decline in the growth rate of capital goods, which will lead to a decline in the rate of capital formation and drag down economic growth.
The BRI was proposed against the background de-globalisation, and it differentiates itself in several aspects from the current trend of globalisation, Li said.
The BRI connects poorer countries, while under the older model of globalisation, poorer countries were usually marginalised and couldn’t enjoy its benefits, said Li. BRI allows fairer participation and lets everyone have a chance to enjoy the benefits of globalisation.
Additionally, instead of prioritising rules and values, the BRI promotes economic development as the top priority. The BRI is dedicated to cooperation among different countries and to advancing the industrialisation of different countries, and it is aimed at meeting people’s most basic demands and the alleviation of poverty. China therefore is the source of inspiration for these countries for the development of different industries, Li said.
The BRI is also aimed at cooperation and mutual benefits. Traditional globalisation has resulted in the homogenisation of different countries, but the BRI will recognise and respect the differences. Helping countries set localised development plans is key in the Belt and Road Initiative.
Overall, Li said at the China Development Forum that for the new age of new globalisation, the BRI can be an effective solution for crisis and a means of effective collaboration and cooperation in the international community.