Beijing must promote 'co-growth'
China should initiate talks between rising Asian economies and global organizations to nurture sustainable development
The G20 summit in Hongzhi m is China's golden opportunity to take on n leadership position. China can play a mlc by nurturing the developineni of a meaningful communication and initiate dialogues to seek compromise and solutions.
lb restore sia bility, openness and economic hopefulness, China can help to shape the following agenda: Raise the level of understanding among nations,
organize positive dialogues, push for global programs on inclusive growth and take the lead in structural reforms and market liberalization.
Ttie dialogues need to be based on creating understanding and seeking
solutions, and focus on such crucial issues as forging international cooperation in trade, investment and capital Hows.
The dialogues should also recognize the new global distribution of economic power by enhancing the representation of the rising nations in the East in supranational organizations and seeking agreement on putting aside hard-to-resolve territorial issues.
This is imperative because Asia has evolved into an interconnected system with China at the center.
Intr.i-Asia trade stands at 56 percent of total trade. It grew by 77 percent from 2007 to 2014. China is at the epicenter of this trade — with 50 percent of its exports going to Asia while 60 percent of its imports are from Asia.
Intra-Asia cross-border direct investment has also increased substantially, again due to the China factor. Driven by rising wages, China has been actively offshoring labor-
intensive work to neighboring countries Mich as Vietnam, Malaysia and Laos.
At the same time, it is in-shoring skill and technology that are more intensive value-added. Some (iti percent of the Chinese mainlands outward foreign direct investment (FDI) stays in Asia. Excluding I long Kong, Macao and tax havens, 40 percent Of outward FDI from the Chinese mainland stays in Asia.
This transformation is further aided by the Internet and the digitization revolution in almost all countries. For example, the Internet directly connects buyers and sellers, empowering them with information that allows for a reduction in the need for intermediaries.
In the banking sector, mobile payments and financial technology reduce transaction costs and connect savers and users of funds. All these level the playing field and lead to an efficiency revolution driven by the private sector.
A pan-Asia production network for the fast-growing Asian consumption is developing with China at the center. Hut other Asian countries and the West still play significant roles.
China can take the lead in generating a vibrant and well-connected Asia for sustainable and harmonious "co-growth". In that spirit, it can invite leading Western nations to join Asia's economic renaissance.
As the new nile co-maker, China needs to rise to the occasion and recognize how global dynamics have changed. 'Hie vision is to lead from Asia and nurture the development of the region as the engine of growth for the world.
True, China does not want to be seen as trying to be a global rule-maker. But it can, and should, take the lead in enhancing the rising Eastern nations' representation in ■.iipi.iii.itiiiM.il organizations, including the International Monetary
Fund and the World 'IVade Organization.
The G20 is a good example of tintypes of dialogues China needs to engage in. The approach needs to be friendly and not confrontational, with the common objective to seek a win-win solution. Cornering the issues into an Impasse will not be beneficial to any of the parties involved.
There is currently much criticism of governments and elites not doing their jobs. China can take the leadership position, recognize the problem, consider the causes of these issues and address them. The leaders need to put aside their personal agenda and consider what is g(xul for the country, its people mid how to advance the global economy together.
The author is dean and Stephen Riady Distinguished l*rofessor of National Universiti/ of Singapore Business School.