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Multilateralism embraced at CIIE to break deadlock in gloomy world economy


Officials and scholars convening in Shanghai for the China import expo are calling for re-embrace of multilateralism to break the "vicious circle" of economic downturn.

XinhuaUpdated: November 7, 2019

Uncertainties rising from trade barriers are bearing on the world economy. Officials and scholars convening in Shanghai for the China import expo are calling for re-embrace of multilateralism to break the "vicious circle" of economic downturn.

Photo taken on Nov. 4, 2019 shows Jinbao, mascot of the China International Import Expo (CIIE), at the south square of the National Exhibition and Convention Center (Shanghai), a main venue for the second CIIE, in Shanghai, east China. [Photo/Xinhua]

"Global output growth is slowing down. And foremost, governments' scope to use traditional monetary and fiscal policy tools is limited. The optimal way forward is for countries to work together," said Director-General of the World Trade Organization (WTO) Roberto Azevedo while addressing the opening ceremony of the second China International Import Expo (CIIE) on Tuesday.

Azevedo and trade ministers or their representatives from 33 WTO members expressed staunch support for the rule-based multilateral trading system at an informal WTO ministerial meeting on the sidelines of the CIIE on the same day.

Uncertainties dragging down growth

In its latest World Economic Outlook (WEO) report released last month, the International Monetary Fund (IMF) lowered its global growth forecast for 2019 to 3 percent.

Noting that this is the slowest pace since the global financial crisis, IMF chief economist Gita Gopinath said that "there is no room for policy mistakes."

The 3-percent global growth projection for 2019 is down 0.2 percentage point from the IMF's estimation in July, and the growth projection for 2020 was also lowered to 3.4 percent, down 0.1 percentage point from the earlier estimation.

Previously, the July WEO report already downgraded growth forecasts for 2019 and 2020, each down by 0.1 percentage point from those in April.

"The weakness in growth is driven by a sharp deterioration in manufacturing activity and global trade, with higher tariffs and prolonged trade policy uncertainty damaging investment and demand for capital goods," Gopinath told reporters at the global lender's headquarters last month.

For decades, predictable and open international markets have allowed countries and companies to specialize and devote more resources to what they do well, and brought growth, development and unprecedented reduction in poverty, said Azevedo in the CIIE opening remarks.

"But instead of predictability, the ongoing trade tensions mean that international markets are today marked by uncertainty all over the world," he said.

"Trade related policy uncertainty has become the leading drag on growth, on trade and investment. We cannot afford to let this continue," said the WTO chief.

Breaking the vicious circle

"We need to 'join hands' with each other instead of 'letting go' of each other's hands. We need to 'tear down walls,' not to 'erect walls,'" said Chinese President Xi Jinping in his opening speech at the second CIIE. "We need to stand firm against protectionism and unilateralism. We need to continually bring down trade barriers, optimize global value and supply chains, and jointly foster market demand."

The Chinese president announced concrete measures to continue opening up its market. Steps will be taken to further lower tariffs and institutional transaction costs, develop demonstration zones to promote import trade by creative means, and import more high-quality goods and services from around the world, he said.

The country will further ease market access for foreign investment, shorten the negative list and continue to improve the business environment to make it more market-oriented, law-based and internationalized, Xi said.

French President Emmanuel Macron hailed in his speech at the CIIE opening ceremony China's promise of higher-level opening up, saying that China's reform and opening up policy has been "a turning point" in the history of the world and a great advantage of China.

Macron also called for upholding the multilateral trading system to address the current common problems including imbalance, adding that countries should work in the spirit of cooperation and openness.

"Only cooperation can break down the vicious circle of uncertainty, under investment and slow growth and deliver bravo business win-win outcomes," said Azevedo.