Friday, May 24, 2024

Trade openness urged to spur global growth

By Tlotlo Lemmenyane

Trade openness was the trending subject this past Monday at the inaugural China International Import Expo (CIIE) that was hosted in Shanghai, China. The talks cascaded from the perspective of the global economy all the way down to the individual countries that make up this encompassing environment. A sense was created that even small countries such as Botswana have a space in the big and complex global economy.

The global economy was depicted as an ocean in which every country in it must sail in so as to ensure inclusiveness. “For us the challenge is to put every country in a position where it can swim in the ocean,” said the World Bank Group President, Jim Yong Kim. Kim said that in trade there should be no need to choose between inclusiveness and openness. It was apparent that such a bold mission will not be easy to achieve. Kim pointed to the acceleration of the return of protectionism as a threat to the attempt of creating openness. He identified protectionism as harmful, suggesting as a result that it might be difficult to establish an environment in which openness and inclusiveness mutually existed.

Put differently by the Chinese President, Xi Jinping, “practices of the law of the jungle and winner takes all only leads to a dead end”. President Xi told the audience that the China’s decision to introduce CIIE was, among other reasons, that countries seize opportunities offered by China’s development. He described the bigger picture of CIIE as being an initiative through which countries can come together to cope with challenges of the global economy which at present is characterized by complexity. The solution he offered was that countries should be willing to open wider and create space for mutual cooperation. He said that cooperation  and openness will remain essential for trade. According to President Xi this first installment of CIIE attracted more than 600 companies and over 400, 000 buyers to explore trade deals as well as the participation of 172 countries, regions and institutions.

Prior to 1940, the year which China set in motion her reform and opening up policy, the country was largely characterized by a closed economy. In giving China’s place within the global economy as envisioned under CIIE President Xi said that the country pursued its development with its door open. He added that China achieved her economic growth from her openness. “Openness has become a trademark of China,” he said.

The global economy’s complexity which President Xi alluded to has been attributed as the cause behind the changed dynamics regarding China’s economic growth. The country’s growth trajectory became unparalleled years following the period of reform and opening up, registering remarkable double digit growth. But in recent years the impressive growth decelerated, owing in part to the global economy’s volatility, and began a new trend of single digit growth. In light of this China re-looked her growth path and initiated a new growth model which was said to be quality growth. President Xi said that quality growth can only be guaranteed by wider openness. He added that China will remain a strong advocate of growth in the global space. The need to stimulate potential for increased exports, part of which will need to reduce institutional costs related to exports; broadening market access  through improving business environment and reducing investment restrictions; exploring new horizons of opening up such as developing free trade ports structures with Chinese characteristics were examples that President Xi gave when outlining steps that need to be taken in order for openness to grow.

Kenyan President, Uhuru Kenyatta, supported the narrative by stating that CIIE was the fitting launchpad for growing the China-Africa cooperation.  President Kenyatta cited examples in Kenya whose development is owed to the cooperation between the two countries, adding that the trade openness is also exemplified by the production plants that have set up in Kenya. “In the recent past this relationship has grown in more important ways,” he said.


Read this week's paper