蟾蜍的毒性:Heading to a great power, what should China do next?

来源：百度文库 编辑：九乡新闻网 时间：2024/04/28 19:25:14

Heading to a great power, what should China do next?

China economy.jpg (30.67 KB)
2011-3-18 10:55




By Martin Wolf


China is a rapidly emerging economic superpower. Yet China is still far from a high-income country. What does this novel combination mean for China itself and for its place in the world?


In setting out to address that question, we must start with the obvious point. A country with such a huge and growing impact on the world cannot ignore its effect on others. The defining characteristic of such a superpower is that it cannot expect to remain a free rider. What it does and does not do has consequences for the entire global system. As William Shakespeare might have said, China has achieved greatness and now has responsibility thrust upon it.


Defining China’s interests

China needs to develop a policy not just for its interaction with the global economic system, but also for the development of that system. In doing so, it will have to start from a definition of its national interests, values and objectives. I would argue that China’s overwhelming national interest lies in maintaining a stable, peaceful and co-operative global political and economic environment. It is only in such an environment that China can be confident of maintaining rapid economic development.


How should China, as one of the world’s leading powers, seek to achieve that objective? Broadly, I would argue that this interest would be best secured via development of a rules-governed, institutionally-based global system. With this general objective in mind, I want to discuss four principal areas of policy: finance; money; trade and direct investment; and natural resources. This is not an exhaustive list, by any means. But these are some of the principal issues now facing China.


Global finance

In the long run, China is likely to emerge as the most important player in the global financial system. Its objectives must be, first, to create a domestic financial system that is capable of supporting its own economic development; second, to help promote a global financial system that supports a rapidly growing and reasonably stable world economy; and, third, to protect the former – the domestic financial system – from the excesses of the latter – the global financial system. This is, in fact, a huge challenge, because of the complex interaction between global and domestic finance.


I would argue that in achieving this complex reconciliation China’s policies should be guided by the following four broad principles.


First, the Chinese authorities should assume that in the long run, possibly as long as a generation, China’s financial system will not only be fully integrated into global finance, but is likely to emerge as one of its hubs.


Second, the transition to full integration will be not just lengthy, but complex and fraught. For this reason, it will take some time and needs to be carefully orchestrated. An important step along the way will be to free the outflow of private capital from China, particularly foreign direct investment and portfolios capital. Full integration of banking systems is particularly dangerous and needs to be handled with much care.


Finally, it is strongly in China’s interests to support efforts to make the global financial system less unstable. China has been a full participant in the Group of 20’s discussion of financial sector reform, which have gone largely in the direction supported by China’s authorities: tighter regulation and higher capital requirements. China feels, with some reason, that its relatively cautious approach to the regulation of the banking system has been vindicated by recent events. As a result, a degree of convergence of regulatory philosophy has occurred between China and the western powers, though full convergence has certainly not yet been achieved - and may never be.


Global money

Closely related to reform of global finance is reform of the global monetary system. Here, as I have noted, China is already an enormously important player. Again, China’s challenge is to reconcile its interests in domestic stability with those of a parallel global stability. Again, I would suggest a number of broad principles.


In the first place, China needs to recognise that its own policies towards the global monetary system have proved to be domestically destabilising. This is particularly true of exchange-rate intervention and reserve accumulation.


In the second place, China needs time to extricate itself from its distorted initial position. That is going to be quite difficult. The central elements will need to be a combination of accelerated appreciation of the nominal exchange rate, with faster liberalisation of the capital outflow, a shift of disposable incomes towards households and better safety nets for the latter, to lower the enormous level of precautionary savings.


In the third place, China needs to develop a strategy for reform of the global monetary system that fits with its interests in managing the interface between its domestic development and global stability. In doing so, it needs to recognise the reality that the accumulation of large claims on supposedly safe foreign liabilities must be matched by a corresponding supply. Unfortunately, the global system seems able to generate such a supply only via the ultimately self-defeating means of huge fiscal and external deficits in the US.


In the fourth place, China may wish to develop its own views of how the global monetary system should operate in the long run. It appears, however, that those views are likely to be in conflict with the dominant (though not universal) western consensus that the least bad system is one of freely floating exchange rates among large economies that possess domestic monetary autonomy, with monetary policy managed by independent inflation-targeting central banks. China and its partners may need to recognise a fundamental and enduring tension between their views.


Finally, given this impasse, it is in China’s interests to find a pragmatic accommodation via the discussions now occurring within the G20. Such an accommodation would focus on indicators of disequilibrium, the methods and timetable of adjustment, generous and effective liquidity provision for countries in difficulties and governance reforms in the International Monetary Fund, to make it a more legitimate and effective interlocutor for China and other emerging countries.


Global Trade and Investment

Trade has been China’s great success. It is on its way to becoming the world’s most important trading entity. This makes China the natural successor of the US and, before that, the UK, as guardian of the open rules-based trading system. It is important, for this reason, that China abides by all the rules and principles of the system and play an important part in developing it further. This raises several important issues.


First, China can try to play a role in bringing the interminable Doha round to some sort of conclusion, however limited.


Second, China has a rising interest in protecting its own intellectual property and, for this reason, a matching interest in ensuring its own adherence to these rules.


Third, China will also have a growing interest in protecting its direct investment abroad. For this reason, it should promote stronger rules on protection of foreign investment. This is one of the most important direction for the World Trade Organisation.


Finally, as a global trader, China has a strong interest in ensuring that any regional trade arrangements it joins are compatible with the global rules.


Access to Natural Resources

The last and, quite probably most important issue is access to natural resources. China is, for the first time in history, dependent on access to imports of industrial raw materials and food. Indeed, it is already the world’s largest importer of most raw materials. Moreover, this dependence seems certain to increase. In the process, China has played the dominant role in raising the prices of these materials, shifting global relative prices against itself and other countries dependent on commodity imports, while benefiting commodity exporters.


For China, as a resource-user and nascent superpower, policy in this area is of potentially the highest importance. It has a strong interest in generating global agreement on how best to access and manage the world’s resources. China’s immediate interest, however, is narrower: it is to gain access to the world’s resources on the most favourable terms. It has decided, quite reasonably, to use its cheap capital and labour to secure this end. That is, in itself, not only in China’s own interests, but in those of other consumers. Since resources have global prices created in global markets, any increase in supply is to the benefit of all.


Need any difficulties then arise? I can see three dangers.


First, the potential shift in relative prices might prove to be very difficult to handle. The most important commodity is oil, the world’s principal transport fuel. A technological revolution will be required. Nothing being discussed now is likely to prove sufficient.


Second, it would be helpful if a consensus could be reached about the terms of investment and trade in natural resources, comparable to the rules on other aspects of trade in the World Trade Organisation. The aim should be to ensure that commodity exporting countries – particularly poor ones, with limited governance capacity – benefit from foreign investment and exports of their natural resources. It will be immensely important for China to play a big role in reaching any such global agreements.


Finally, the core of any such agreement should be free trade. The great powers should agree to let prices be set in world markets, with, of course, the possibility of longer term contracts, where desirable.


Conclusion

Being huge is not altogether an advantage. China cannot develop unnoticed and without effect on the world around it. As it grows, its impact expands commensurately. The next two decades will, in this respect, be far more challenging than the last three. Already a great economic power, China is likely to be the world’s largest economy, even at market prices, in not much more than a decade. Its influence on the world economy will be pervasive. Somehow, it must reconcile the imperatives of rapid development with the need to take full account of its massive and growing impact on the world as a whole. Here I have discussed four crucial aspects – finance, the monetary system, trade and natural resources. In each China will have to develop its own agenda, one that secures its principal objectives of rapid development at home and stability abroad. It will not be easy to achieve this combination. But China has not alternative.

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