Nicholas Rosellini: “China’s 2nd Opening Up and Development Forum”

Nov 11, 2017

Opening-up as an Innovative Contribution to Global Sustainable Development

Mr. Wang Bingnan, Vice Minister of Ministry of Commerce,

Mr. Ning Jizhe, Deputy Director of National Development and Reform Commission,

Ms. Chen Hong, Vice Mayor of Beijing Municipal Government,

Mr. Gu Xueming, President of the Chinese Academy of International Trade and Economic Cooperation,

Distinguished guests, ladies and gentlemen,

It is a pleasure to join you today at the 2nd annual China’s Opening up and Development Forum. First and foremost, please allow me to express my gratitude to the Chinese Academy of International Trade and Economic Cooperation for the organization of this Forum. CAITEC has been a key partner for many years, working with us on many significant research and policy initiatives.

As we all know, the global environment for development cooperation has been changing quickly in recent times. Understanding the tipping points is crucial for sound policy decisions. Guaranteeing that fruits of globalization are enjoyed by all is a crucial task for every country, both rich and poor.

But globalization is having other effects, reflected by the challenges countries have to face at the domestic level. Rising protectionism and nationalism in developed countries affect interdependent structures of global development.

At the same time, the world community has adopted an ambitious, comprehensive global development agenda that promises ‘to leave no one behind’ – the 2030 Agenda for Sustainable Development. Sustainable development as an economic, social and environmental metric has become the basis for international development cooperation. Trade, investment, finance and governance will impact on the 17 Sustainable Development Goals in critical areas.

It is this changing landscape that opens doors for different engagement by emerging actors, including China. This offers an opportunity for China to consolidate its growing international role and enhance its international reputation.

China’s Achievements since it’s Opening-up

Our theme for this year – “China’s Opening Up Strategy and Global Economic Governance” – is highly relevant as we see China’s successful development being increasingly matched by its support of global development.

The story of China’s rapid economic growth and social development in the nearly forty years following the Reform and Opening up of the economy in 1978 is well known, but still extremely important for us to draw lessons relevant to other countries. If customized to local conditions, China’s domestic experiences can be an important building block for many countries as they seek to increase growth in a sustainable manner.

Take poverty reduction as an example. More than 10 million Chinese people have been freed from poverty each year since 2012. China has many valuable insights to share with the world. I would like to mention three points.

First, China has adopted a phased approach to eradicate poverty. This means, as drivers of poverty evolve over time due to changes in social-economic and environmental contexts, poverty strategies are adjusted.  The dynamic nature of this approach can be seen in, for example, how the poor are identified, how programs and instruments are designed, as well as how financial resources are managed and monitored. This adaptive management approach has made it possible for China to gradually improve precision in targeting and addressing the root causes of poverty.

Second, China has increasingly applied a broad-based poverty alleviation approach. The targeted poverty alleviation strategy – exemplified by five major categories of measures that touch upon education, social protection and industrial development among others – is a good case in point. At its core, the strategy is devised in recognition of the fact that poverty is a multi-dimensional problem. If implemented effectively, it can contribute to realizing job creation and public services provision, all of which are essential to ensure inclusive growth through providing equal opportunities for all.

Third, China’s institutional design has allowed increasing flexibility for innovation and testing of new approaches. For instance, industrial development has developed by leaps and bounds in many poor Chinese villages. A great deal of this progress has been through the enabling of local entrepreneurship with proper policies and guidance.

These achievements not only can benefit China, but can be relevant worldwide and contribute to global poverty reduction efforts.

Let me briefly explain how China’s experience and future role mirrors globally by focusing on three, critically important dimensions:

  • Global governance and multilateralism,
  • Economic engagement and stewardship in climate change mitigation and environmental protection.

In terms of global governance and multilateralism, China’s role is shaped by:

First, “a win-win, opening-up strategy” on multilateralism has been accompanied by constructive proposals to strengthen existing multilateral institutions as well as founding new ones. This includes the New Development Bank (NDB), and most prominently the Asian Infrastructure Investment Bank (AIIB), broadening the range of finance available to developing countries.

Second, in terms of international peace and security, China is the largest contributor of troops and second-largest contributor of funds to UN peacekeeping missions among the five permanent members of the Security Council. It has further pledged USD 1 billion to support multilateral cooperation through the UN Peace and Development Trust Fund. In terms of contribution to the UN development system, China is also committing to increase its contributions by USD 100 million by the year 2020.

Third, the extent to which China can be a champion of international development, reflects its championing of the 2030 Sustainable Development Agenda. The Chinese government has expressively showed its sustained commitment to national SDG implementation in its domestic implementation plan, across industrial strategies and in its commitment abroad.

Fourth, China’s approach to international development cooperation. China’s engagement combines development assistance, direct investment and loans, transforming the development landscape with leveraged financing, rather than grant-making. Its growing role has given developing country governments more choice and bargaining power.

Fifth, the adoption of the Sustainable Development Goals (SDGs), has further increased the importance of South-South Cooperation. China is already playing a leadership role on SSC. The establishment of the South-South Climate Cooperation Fund and the Assistance Fund for South-South Cooperation, with pledges of $3.1 billion and $3 billion respectively, shows China’s proactive approach to SSC and its commitment to the 2030 Agenda. Indeed, during the recent BRICS Summit in Xiamen, President Xi Jinping pledged an additional $500 million to the Assistance Fund.

Let me now turn to the role of cross regional economic growth.

Inequality among countries and regions call for new initiatives and efforts to revitalize economic prosperity.

The Belt and Road initiative promises to help countries overcome these constraints, by providing investment in trade infrastructure and trade facilitation; better connectivity in transport, information and communications technology (ICT) and energy. Such cutting-edge opportunities can breathe new life into under-invested countries, particularly in Africa, Southeast Asia and beyond, especially if projects are demand driven and consider macroeconomic, social and environmental implications.

Engagement through leadership and ownership of the process by BRI countries is crucial. It is also important that projects provide a fair distribution of benefits across communities and regions, while combatting corruption and other risks.

To be consistent with the Sustainable Development Goals and `leave no one behind`, the BRI should also promote social inclusion, environmental sustainability and inclusive economic growth.  Overall, the Belt and Road Initiative can be accelerator of the SDGs, which require financing and creative approaches to ensure their implementation.

This leads me to raise environmental sustainability, particularly climate change adaptation and mitigation as well as environmental protection.

In terms of challenges, how will BRI address current patterns of industrialization with their considerable environmental footprint. I believe that efforts are underway to increase cleaner and resource-efficient production, and the decoupling of economic growth from environmental degradation.

This will also have to involve a major effort to achieve cross-border coordination of mechanisms and policy frameworks to implement and monitor sustainability efforts.

Addressing its own development experience, China displays strong commitment of being a forerunner to exit polluting and destructive economic pathways. China’s interests lie firmly in a vision of a low-carbon future, its sustainable development and climate action are driven by national interests, e.g. the impacts of climate change, hazardous air pollution and energy security. As the world’s largest energy market, limiting its carbon footprint will exercise immense effects on global climate targets.

Estimates find that China’s commitment to reduce the carbon intensity of its economy by 60-65% by 2030, compared to 2005 levels, could achieve a reduction of carbon emissions of 14% compared to currently projected levels. [1] Spearheading innovation and technology, China’s leadership recognizes the economic benefits of a low-carbon future, thereby decreasing coal reliance, clean energy investments and sustainable industry. As China leads climate change mitigation and adaptation by example, its reputation for global environmental stewardship have been recognized, as well as its ambition for promoting ‘ecological civilization’.

This is encouraging progress. Overall, if China succeeds in achieving its targets it will have reached a major milestone of creating a greener economy featuring resource-efficiency, reduces climate chance-related risks and improves the health of its people. For China’s changing role in the world this means that with its increasing engagement, its global outreach will be coupled with growing responsibility in the global arena. As evidenced in President Xi’s speech during the 19th CCP congress, China’s ambition for the coming decades is clear. It strives to show global stewardship in the face of the magnitude of the challenges our world faces.

Conclusion

Earlier this year in Davos, President Xi said that the global market system is the ocean we all swim in. Looking ahead, we need to reinvigorate the multilateral institutions which were established to solve our shared problems.  As China’s global footprint grows stronger, it can contribute to creating an enabling international environment for development, building an inclusive multilateral system and improving global economic governance. BRI has a crucial role to play as global connector as well as potentially as an accelerator for the SDGs.

Throughout the past decade, the UN System has supported China in its domestic development efforts and looks forward to continue supporting the country in its engagement abroad. We stand ready collaborate to ensure China’s vision for global win-win and prosperity translates into sustainable opportunities for all.

Once again, please allow me to thank the organizers for such a wonderful event and I look forward to a stimulating discussion with all of you.

Thank you very much!

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