Keynote Speech to the First High Level Conference of the Forum on Global Action for Shared Development
Organized by the China International Development Cooperation Agency
Opening remarks in Chinese.
Good morning distinguished guests. I am Yuen Pau Woo, an independent senator in the Parliament of Canada. Thank you to the China International Development Cooperation Agency (CIDCA) for inviting me to speak at today’s High-Level Conference. I wish I could be with you in person but am happy nevertheless to be making my remarks by video. I am also pleased to join you online from Ottawa for some of your sessions today.
Let me first congratulate the organizers on the theme of this forum, which is Global Action for Shared Development. More than ever, we need GLOBAL action and SHARED development. This is a mindset that is vital for a world that is on the one hand facing profound economic, environmental, and social challenges, but where more and more countries are pursuing nationalist policies that discriminate against large portions of the globe, especially developing countries. There is a growing trend of protectionism and weaponization of economic assets that is harmful for both the global economy and for countries that pursue these policies.
Whether it is technology or resource export bans, economic coercion of different varieties, arbitrary restrictions on inbound and outbound investment, stifling of international research collaboration, or curbs on people movements, these kinds of actions diminish trust, undermine international norms and rules, and inhibit economic development. They are the antithesis of the GLOBAL action and SHARED development that this conference seeks to promote. A world that runs according to the rules of powerful countries is not a world that is based on the international rule of law. And it is even worse if different sets of powerful countries establish different sets of rules and practices for the partners they work with. It is not just that this kind of world will be economically and technologically fragmented; it is that the fragmentation will be based on distrust and zero-sum rivalry, which is a recipe for mutual hostility and outright conflict.
All the sub-themes of your conference present examples of how fragmentation will be harmful for the world and why an approach based on GLOBAL action and SHARED development is the better way to proceed. Let me go through each one briefly:
In the case of global poverty reduction, there is a risk today that rich countries responding to a domestic backlash against globalization will pursue economically sub-optimal policies that appear to benefit “left behind” communities and citizens in their nations, but which make it more difficult for poor countries to access industrialized countries markets or benefit from productive capital flows, as a way of pursuing their own poverty reduction and economic development goals. In this context, it is important to remember that the sharp improvement in global income inequality in the last 40 years is due mostly to a reduction in inter-country inequality, with China standing out as the key factor. For all the shortcomings of globalization, the expansion of international trade and investment in recent decades has been very positive for most developing countries. While a reversal of the most extreme forms of globalization -- in the form of “neo-liberal” economics -- is necessary and probably inevitable in advanced countries, there is a danger that the pendulum will swing too far in the opposite direction, resulting in policies that disregard the harmful consequences of “de-globalization” for the international distribution of income.
Any significant reduction in poverty in developing countries will require a transition away from low-productivity agricultural production, which is another of sub-theme of your conference. This means creating jobs in manufacturing and service industries, as well as higher value-added agriculture and agrifood businesses. This transition can be aided by international cooperation, including infrastructure development, technology transfer, and market access. The reorganization of manufacturing supply chains to less developed countries is one aspect of this transition, and it should be encouraged, not least by Chinese enterprises that are looking to enhance their competitiveness and penetrate new markets. For the same reasons, western enterprises should also pursue these goals, even though most of the current focus on supply chain reorganization in advanced countries is based on the narrower concept of “friend-shoring” and “de-risking”, largely for political reasons. I hope this conference can inspire a fresh discussion on the need to in fact accelerate the diversification of supply chains to less developed countries, based on the imperative of GLOBAL and SHARED development, rather than on geo-politics.
With respect to Green Development and Carbon Neutrality, the importance of GLOBAL action and a SHARED approach goes without saying. There is already a well-established mechanism through the UN for international negotiations on reducing GHGs at the national level and aiding developing countries to meet their goals. The importance of meeting the Paris targets cannot be overstated. It is already the case that many countries are falling behind in their commitments, the challenges for which are largely domestic. However, there are also international factors that are making it more difficult for countries to meet their commitments, including the war in Ukraine, inflation, and the lack of cooperation on green technologies such as renewable energy. In the same way that geopolitical competition is inhibiting international trade and distorting supply chains, a similar zero-sum mentality on green technology will stunt the ability of developing countries to transition to renewable energy sources and reduce the likelihood that the earth will be able to slow climate change and mitigate its ill effects.
The same principles apply to Capital Mobilization and Sustainable Financing, which are essential to poor countries achieving their poverty alleviation and economic development goals in a climate friendly way. Many poor countries are in the grip of a debt crisis caused in part by economic disruptions post-COVID and the sharp rise in US dollar interest rates due to the resurgence of inflation. Failure to address the liquidity and insolvency challenges will mean the drying up of fresh capital to highly indebted countries, which will in turn exacerbate poverty and make the challenge of a net-zero carbon emissions world more difficult.
China has in recent years emerged as a major lender to developing countries, including countries that are now having difficulty servicing their loans. As a relative newcomer to sovereign and private international debt restructuring, China has a steep learning curve in terms of working out settlements with other creditors, including the multilateral banks. It is vital that restructuring arrangements are reached as soon as possible and that the terms of restructuring allow for fresh capital flows and the restoration of economic growth in these countries. The multilateral banks together with international private lenders will have to find a way of accommodating the interests of the newest member of the club, if for no other reason than to ensure that China, as the world’s largest creditor nation, continues to recycle capital to the developing world for productive and sustainable economic growth.
Your last sub-theme for the conference -- Digital Connectivity and Artificial Intelligence – is an area that perhaps screams out the loudest for GLOBAL action and SHARED development, even if it may end up being the most difficult for such cooperation. The current preoccupation with national security and techno-nationalism in many countries, coupled with the incredible speed with which the digital economy is advancing, makes international cooperation extremely challenging. Legislators in the most advanced economies, including my own country Canada, are struggling with how to regulate different aspects of the digital economy, ranging from questions of gig workers to data privacy to hate speech, and in particular the regulation of general-purpose AI such as large language AI models.
Since there are as yet few or no national regulations on the deployment of AI, the possibility of international cooperation is even more challenging. And yet, we are going to need some level of international cooperation – indeed some kind of GLOBAL action for SHARED development – if we accept the reality of and necessity for cross-border data flows. In the same way that there has been some progress among OECD countries in curbing corporate tax avoidance and harmonizing minimum corporate tax rates, there is also a need for international cooperation to deal with the market power and borderless nature of digital platforms, as well as rules around data use and responsible AI.
There is an urgent need for China to be part of these global conversations, especially with a view to involving the Global South and respecting their interests. That is why I believe this Conference is so important, and I want to again congratulate the organizers for making it possible.
I will be following the progress of the China International Development Cooperation Agency with much interest in the years to come and look forward to CIDCA playing a leading role in promoting GLOBAL action for SHARED development.
Let me close with a Chinese saying: 山重水复，柳暗花明。The mountains are high and the water is deep, but there is always a way forward to a brighter future.
I know that this is the spirit with which this conference has been held and I wish all of you very meaningful and productive discussions.