LIU Liange: Make a joint response to challenges

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LIU Liange

Chairman of Bank of China

Against the backdrop of the reconstruction of the global value chain and the vigorous development of the digital economy, China has bid to accede to economic and trade agreements such as CPTPP and DEPA, attesting to its determination and responsibility to actively participate in global governance and engage in international cooperation. The moves also sent out clear signals that China is committed to promoting multilateralism and global development.

*This expression does not reflect the views and position of the BFA.

Q

Last year, China formally submitted its applications to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and the Digital Economy Partnership Agreement (DEPA), reflecting China’s determination to achieve a high level of openness to the world. What do you think of a CPTPP and DEPA community with China’s accession?

LIU Liange: Against the backdrop of the reconstruction of the global value chain and the vigorous development of the digital economy, China has bid to accede to economic and trade agreements such as CPTPP and DEPA, attesting to its determination and responsibility to actively participate in global governance and engage in international cooperation. The moves also sent out clear signals that China is committed to promoting multilateralism and global development.

China’s applications to join the CPTPP and DEPA will promote the themselves, help accelerate the transformation and upgrading of the Asia- Pacific value chain, and promote the integration of regional economic and trade development. Firstly, it will increase the influence of the agreements. China’s accession to the CPTPP and DEPA will expand the economic and trade volume and market share covered by the agreements. In particular, the digital economy in the founding countries of DEPA is relatively small, accounting for less than 1% of the global digital economy in 2020. Once China joins, the ratio will increase significantly to 17%. Secondly, it will unlock the potential for cooperation. China’s huge consumer market, fully established industrial system and its status as an important trade center will increase the scope for cooperation for the other countries under the agreements. In 2021, the trade volume between China and CPTPP member countries hit $1.4 trillion, accounting for about 23.1% of China’s total foreign trade volume. China’s accession to the CPTPP is expected to further promote efficient, high-level and in-depth economic and trade cooperation. Thirdly, it will facilitate economic and trade exchanges. The CPTPP and DEPA span the Asia-Pacific and the Americas, and China’s accession to the CPTPP and DEPA will cement economic and trade cooperation between the existing contracting states and China, further enhance the degree of trade liberalization and facilitation, and strengthen the connection between the Asia-Pacific and the Americas value chains.

Q

The Covid-19 pandemic has been raging globally for two years, and some countries and regions have gradually started to loosen their border closure, signaling a light of hope for the world. What kind of economic globalization do you foresee in the post-pandemic era? Can the global value chain damaged by the pandemic and geopolitical conflicts be repaired quickly, and what are the new trends of global value chain reconfiguration?

LIU Liange: The global value chain has shown certain vulnerabilities in recent years. Products with refined international division of labor, longer supply chains, and higher dependence on specialized production face a greater risk of value chain disruptions. Some countries rely heavily on foreign imports, and are vulnerable to supply chain disruptions in the absence of a fully developed industry system. Influenced by the pandemic and geopolitical tug of war, some new trends have emerged in the global value chain: First, the regionalization of industrial division of labor. Intraregional trade in value added in both Europe and Asia accounts for more than 50% of the global total, and the North American value chain has also shifted away from global division of labor toward intraregional division of labor. Second, localization of industrial chains. In order to shorten the supply chain, the production processes and various operations formerly outsourcing to different countries and enterprises were taken back and returned to the multinational companies. Third, reshoring of industrial chains. Some countries have increased the production and reserves of commodities and other strategic resources, and tightened control over core industries and technologies. These changes may exacerbate deglobalization, a matter that merits particular attention in all countries.

In the post-pandemic era, as countries begin to lift Covid restrictions, the keen desire for economic recovery worldwide will help promote trade liberalization and bring globalization back on track. All nations need to further promote the integration and improvement of global value chains and promote international multilateral cooperation. Firstly, we should further develop the global multilateral trading system. Strengthen cross-regional trade connections, promote the implementation of multilateral economic and trade agreements, and provide a secure business environment and comprehensive policy support for exceptionally complex value chains. Secondly, we should promote innovation and development of the global value chain. Through business enabled by technologies including those with digital and low-carbon elements, the length of the value chain will be reduced and the transparency of manufacturing operations and international trade will be improved, facilitating the transformation and upgrading of the global value chain.

亚洲浪潮，博鳌视野

立足亚洲 面向世界

传递论坛最新动态 促进亚洲深度合作

全球重要对话的传达者 亚洲共同发展的瞭望者

原标题：《LIU Liange: Make a joint response to challenges》

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