PRESIDENT Xi Jinping attended the opening ceremony of the BRICS Business Forum in virtual format on June 22 and set out four crucial choices to confront current global challenges.
President Cyril Ramaphosa, Brazilian President Jair Bolsonaro, Russian President Vladimir Putin and Indian Prime Minister Narendra Modi attended and addressed the opening ceremony.
About 1 000 economic and trade ministers, envoys to China and representatives from the business community were present at the ceremony.
President Xi said the world is currently facing various binary options. Peace or war? Progress or regression? Openness or isolation? Co-operation or confrontation?
In his view, the trend of globalisation was inexorable and despite the current turbulence would not be reversed.
“Despite changes in an evolving global environment, the historical trend of openness and development will not reverse course, and our shared desire to meet challenges together through co-operation will remain as strong as ever. We should stand high and not allow ourselves to be distracted by fleeting clouds, and we should have a keen appreciation of the law governing the advance of history. We should refuse to be led astray by any turn of events or intimidated by any risk. We should rise to challenge and forge ahead with resolve toward the goal of building a community with a shared future for mankind,” he said.
To address these challenges, Xi set out four choices.
“First, we should embrace solidarity and co-ordination and jointly maintain world peace and stability.
“Second, we should reach out to each other and jointly promote sustainable global development.
“Third, we should tide over difficulties together and jointly pursue win-win co-operation.
“Fourth, we should be inclusive and jointly expand openness and integration,” he said.
Xi noted that the BRICS (Brazil, Russia, India, China and South Africa) grouping was an important co-operation platform and this co-operation has now entered a new stage of high-quality development.
He hoped that BRICS business leaders would continue to act with fortitude and perseverance to champion open, innovative and shared development, so as to add build on BRICS co-operation.
This would deliver more benefits of development to everyone in an equitable and just way.
“As long as we hoist high the sail of mutual benefit and win-win and keep a steady hand on the tiller of solidarity and co-operation, we will break waves and steer the giant ship of BRICS countries toward a brighter future,” he said.
Xi noted that a reading of history shows the division of countries into competing blocs such as took place in the years leading up the First and Second World Wars, brings neither peace nor stability, but rather war and conflict, which is why countries should not seek to protect their own interests at the expense of others.
The correct option is to promote multilateralism and countries around the world should rather work together in the face of difficulties and join hands for win-win co-operation, which is why the BRICS co-operation was so important.
Xi noted that some key industrial and supply chains are disrupted, while commodities prices have soared, which has resulted in high inflation, while international financial markets remain volatile, and the momentum of the global economic recovery is weakening, with several economies on the cusp of a recession.
"People are all worried if the world economy will fall into the quagmire of crises. At this crucial moment, only by sticking together in solidarity and co-operation can we overcome economic crises," he said.
That is why Xi called for efforts to stay open and inclusive, and remove all barriers impeding the development and co-operation between countries.
This should also involve giving a greater voice to emerging countries by strengthening global economic governance with an open and transparent multilateral trading system with the World Trade Organization (WTO) at its core, removing trade, investment and technology barriers, and working to build an open world economy.
“We should encourage the free flow of capital and technology and a continued emergence of innovation and wisdom so as to pool the synergy of global economic growth,” he said.
China has moved in a contra-cyclical way to ease monetary policy while other countries are tightening their monetary policy to combat rising inflation.
China’s consumer inflation rate in May was only 2.1% year-on-year (y/y) compared with 6.5% y/y in South Africa, 11.7% y/y in Brazil, 7.0% y/y in India, 17.1% y/y in Russia and 8.6% y/y in the US.
Preuss is an economist at Forecaster Ecosa