Amid a backdrop of tensions between China and the United States, the Boao Forum for Asia (BFA) was held from Tuesday (Mar 28) to Friday in the coastal city of Boao in China’s southernmost province of Hainan.
Themed “An Uncertain World: Solidarity and Cooperation for Development amid Challenges”, the forum brought together top leaders – including Singapore Prime Minister Lee Hsien Loong, Malaysia Prime Minister Anwar Ibrahim and China’s Premier Li Qiang – as well as the heads of international organisations and experts.
It is the first time the forum has been held in-person since the start of the COVID-19 pandemic.
From discussion topics such as upholding multilateralism and maintaining the security and stability of global industrial and supply chains to the launch of an initiative for more partnerships between free trade zones, the BFA sought to promote development through regional economic integration.
International Monetary Fund (IMF) Managing Director Kristalina Georgieva said at the forum said that countries need to work together to reinvigorate international trade in an equitable way so that more people are able to benefit from globalisation.
She noted that IMF’s research showed that the long-term cost of trade fragmentation could be as high as 7 per cent of the global gross domestic product (GDP).
“And as a highly integrated region, Asia would be the most adversely affected by runaway fragmentation,” Georgieva said.
She also stressed that countries that are in a stronger financial position should help vulnerable nations – especially those that are under debt distress.
This, she said, was important against the backdrop of high interest rate and currency depreciation.
“We urgently need faster and more efficient global mechanisms for providing debt treatments to these countries,” said Georgieva.
Five key takeaways from the event:
China Will Continue To Anchor Global Peace And Development: Li Qiang
Li announced that China’s economy has rebounded from the COVID-19 pandemic, adding that several international organisations have revised upwards their economic forecasts for China for 2023.
“In the first two months of this year, the Chinese economy showed an encouraging momentum of rebound. The situation in March is even better than that in January and February,” he said.
He pointed out how China’s economy has recovered by making Hainan – where the Boao forum is hosted – an example, noting that the tourism sector is booming once again.
“This is a good indicator of the resilience potential and vibrancy of the Chinese economy. It is also proof that the fundamentals underpinning China’s long-term growth are robust and China’s social economic policies are sound and effective,” said Li.
He also stressed that Asia and the entire world is at a crossroads in history where they must join hands to foster what he called an Asian community with a shared future.
“We need to work together to build and anchor for world peace,” he said, noting that peace is the prerequisite for development.
“To achieve greater success, chaos must not happen in Asia. Otherwise, the future of Asia will be lost,” he said.
Li noted that China has been a “builder of world peace, a contributor to global development and a defender of international order”.
“In this uncertain world, the certainty that China offers is an anchor for global peace and development. This has been the case in the past and will remain so in the future,” he said.
Asia A “Bright Spot” In Bleak Global Economy
According to an annual economic report released by the BFA, Asia is expected to increase its pace of economic growth even as the global economy slows down and risks breaking up further.
The Asian Economic Outlook and Integration Progress report said Asia is expected to continue to advance regional production, trade, investment as well as financial integration and cohesion.
“Asia is a bright spot in the bleak global economic landscape, and global economic governance (enters) into the ‘Asian moment’,” said the report.
It added: “Asian economies are champions of reform of the multilateral trade system, deeply involving themselves in global monetary and financial governance and promoting the development of and cooperation in the digital economy.”
The report also called for closer cooperation among Asian countries at a time when global supply chains are being regionalised and Western developed economies are increasing interest rates.
It also acknowledged the influence China’s economic growth has on output for the rest of Asia, and estimated Asia’s weighted real GDP growth rate to be 4.5 per cent in 2023.
This is up from 4.2 per cent two years back, making the continent a “standout performer” considering the global slowdown, the report noted.
Safeguarding Regional Economic Integration
Officials and experts called for efforts to safeguard and advance regional economic integration. This, they said, is crucial for regional and global peace, Global Times reported.
At a panel discussion, Zeng Peiyan, the vice-chairman of the BFA’s Council of Advisors reportedly said that there were “certain countries” that were stirring tension and pushing for an economic “decoupling”.
“We should replace self-importance and dominance with communication and openness. We should especially oppose taking sides and forming small groups and cliques,” Zeng was quoted as saying by the Global Times.
“We, Asians, remember vividly the wounds of both cold and hot wars. We know how precious peace and stability is and how important development is.”
Separately, secretary-general of the Association of Southeast Asian Nations (ASEAN) Kao Kim Hourn warned against rising major power rivalry that may escalate into war.
“Competition and escalating tensions are major security challenges,” Kao reportedly said, stressing that ASEAN must ensure that it does not become “a proxy” of any party or parties in a major power rivalry.
PM Lee also noted that any clash between the US and China will have grievous consequences for themselves and the world.
“Most worrying is the state of relations between the US and China. Big powers have a heavy responsibility to maintain stable and workable relations with one another, because any clash between them will have grievous consequences, for themselves and the world,” the Singapore leader said.
“And yet the US and China are at odds over many intractable issues, including trade and investments, supply chains, cybersecurity, emerging and critical technologies, as well as freedom of navigation.
“We hope that China and the United States will succeed in stabilising their relationship, and establish sufficient mutual trust and respect to cooperate in areas where their interests are aligned.”
In a bid to foster closer integration, an initiative that called for more partnership between free trade zones (FTZ) across the world was also launched in Boao, China Global Television Network (CGTN) reported.
Proposed by more than 20 FTZs in China, the UAE and South Korea among others, the initiative is aimed at strengthening cooperation in aviation and shipping networks, logistics and cross-border e-commerce.
Need For Global Collaboration In ESG Space
Experts also emphasised the urgent need for global collaboration amid the immense growth potential within the environmental, social and governance (ESG) landscape, CGTN reported.
At a panel discussion on the topic, Yi Xuedong, director of the Research Centre affiliated with the state-owned Assets Supervision and Administration Commission (SASAC) of the State Council said that the China Securities Regulatory Commission and the country’s three main stock exchanges are urging listed firms to disclose ESG information.
The SASAC has also been working with South Korea’s SK Group in developing a social value system, CGTN reported, exemplifying the potential for international and public-private partnerships in developing ESG strategies.
Separately, Hans-Paul Burkner, the global chair emeritus of Boston Consulting Group, stressed that companies need to prioritise ESG to ensure transparency and responsibility.
China Seeks A Greener Future
At the Boao forum, Chinese officials also talked about how the financial sector can facilitate the country’s ambition of attaining carbon neutrality in 2060, CGTN reported. Carbon neutrality is a state of net zero carbon dioxide emissions.
Yi Gang, the governor of the People’s Bank of China – the country’s central bank – said that there was a need for financial incentives to achieve China’s green goals.
According to CGTN, commercial banks could apply for low-cost funding from the central bank after the loans for carbon reductions are made. The central bank will then provide 60 per cent of the loan principal made by the commercial banks for carbon-emission cuts.
Thus far, Yi Gang said that over 300 billion yuan (US$43.6 billion) in re-lending facilities have been issued, CGTN reported.
Separately, deputy director of China’s National Development and Reform Commission Zhao Chenxin said that there are challenges ahead in the country’s pursuit of carbon peaking and carbon neutrality.
He reportedly said that the commission will further promote the clean and efficient use of coal and vigorously develop renewable energy. – CNA / Agencies
