Global Governance and Sustainable Economic Development

How to rebalance the global Economy?

While political leaders prepared for the G20 summit in Seoul, experts from China and other countries gathered in Beijing to discuss issues of global economic governance and sustainable development. Organized by the Bertelsmann Foundation and the China Center for International Economic Exchanges (CCIEE), the conference charted new paths for more stable and sustainable global economic and financial architectures.

In a speech opening the event, CCIEE Secretary General Wei Jianguo emphasized the need to overcome narrow national interests and to replace confrontation with cooperation. Bertelsmann Foundation Chairman and CEO Gunter Thielen lamented that actions necessary for the long-term stabilization of the global economy had yet to be taken. He said that it is "high time to join forces" to find ways to implement needed reforms.

Chinese Vice Finance Minister Li Yong, Export-Import Bank of China Chairman and President Li Ruogu and Bank of Beijing Chairwoman Yan Xiaoyan delivered additional keynote speeches at the opening ceremony.

The day’s discussions and debates revealed that although panelists hold different views about the best ways to rebalance the global economy, protectionism is widely seen as a danger that could plunge the world back into crisis. Many participants also voiced strong criticism of the US Federal Reserve Bank’s announcement that it would purchase another US$600 billion of government securities ("Quantitative Easing 2"). There was also general agreement that, in the long term, a basket of currencies should replace the US dollar as the world’s reserve currency.
These positions were reinforced by a new Bertelsmann Foundation study unveiled at the conference. The study, "Rebalancing the Global Economy", by Stefan Collignon of the Sant'Anna School of Advanced Studies in Pisa (Italy), Richard Cooper of Harvard University, Masahiro Kawai of the Asian Development Bank Institute, and Yongjun Zhang of CCIEE, argues that the many origins of today's global imbalances mean an appreciation of the yuan alone would produce little benefit and could be counterproductive. The authors note that a much stronger yuan would depress Chinese exports and, subsequently, the availability of Chinese capital, which has helped keep interest rates low and spur growth.

The second day of the conference was a closed-door session devoted to the issues of defining criteria for sustainable global economic equilibrium and building a shared and balanced global economic structure. The event concluded with remarks from CCIEE Permanent Vice Chairman Zheng Xinli on the unavoidable necessity of sustainable global economic development.

More than 120 Chinese and foreign guests attended the conference, including government officials, business executives, academics and journalists.


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