Introduction: The Jeju Forum is a regional multilateral dialogue platform that has as its core the promotion of peace and prosperity in Asia. From November 5 to 7, the 2020 Jeju Forum - under the theme of “New Blueprint for Multilateral Cooperation and Development: Global Epidemics and Human-oriented Security” - was held in Seogwipo, Jeju Province.
Nearly 270 political and business leaders participated in an online or offline format, including:
· UN Secretary-General António Guterres
· Former UN Secretary-General Ban Ki-moon
· South Korean President Moon Jae-in
· Former U.S. President William Clinton
· Former Singaporean Prime Minister Goh Chok Tong, and
· Chinese Ambassador to South Korea Xing Haiming.
Mr. Cheng Yonghua, Senior Fellow at the Taihe Institute and former Chinese Ambassador to Japan, was invited to deliver a keynote speech.
On November 7, Mr. Cheng delivered his keynote address for the “Dynamic Value Chain, Technology and Policy in East Asia under the Trade War” seminar of the 2020 Jeju Forum.
Below is the English translation of Mr. Cheng’s presentation:
I am very happy to be invited to participate in this year’s Jeju Forum.
2020 is a very special year, especially during the onslaught of the sudden COVID-19 pandemic, which has brought unprecedented shocks to the international community and accelerated the evolution of the global landscape.
It is worth noting that the fermented anti-globalization trend, surging protectionism, and more uncertain factors are now being faced by the human society.
Today, the world economy has fallen into its worst recession since the Great Depression as the pandemic has significantly impacted the global supply network as many nations are rethinking and restructuring their industrial chain in the light of economic security.
The theme “Dynamic Value Chains, Technology and Policy in East Asia under the Trade War” is presented at just the right time given the context, under which I would like to make four statements:
First, the reshaping of the value chain should obey the “rule of market”. The current global division of labor, embedded in the structure of the industrial chain and supply chain, results from the free flow of production factors guided by an “invisible hand” under economic globalization.
Although the COVID-19 pandemic has caused significant disruption and impact on economic activities, rational enterprises will continue to allocate production resources according to cost-benefit analysis - the restructuring of the industrial chain during and after the pandemic should not and cannot deviate from market forces.
However, the new value chain in the post-pandemic era may be more regionally concentrated, such as the East Asian network that has been well established by China, South Korea, Japan and ASEAN countries.
In the future, a strengthened cooperation among East Asian countries will definitely leverage regional advantages and boost transformation and upgrade the regional industrial chain. Of course, our cooperation here is not exclusive to Asia and we continue to extend our friendship with the United States and Europe.
Second, unilateral “bullying” is the most serious challenge to the healthy development of our global value chain.
During the pandemic, most countries hope to overcome the difficulties through solidarity and cooperation. However, we also witnessed unilateral hostility, blocked supply chain, and access restrictions caused by a few counties based on political bias.
At present, the risks of economic confrontation around the world are gradually accumulating, as the products of globalization such as the global supply chain, the international financial system, and the communication infrastructure are increasingly becoming a bargaining chip of this economic game.
To choose between multilateralism or unilateralism, or to take a position on win-win cooperation or zero-sum game, are important questions for all at this watershed moment. I believe every country should still establish the concept of win-win cooperation, and strengthen the global economy through fair and inclusive governance, higher levels of openness and deeper cooperation. We must continue to work together in an unswerving effort to build an open world economy, maintain the WTO-based multilateral trading system and ensure the stable and smooth flow of the global value chain.
Third, the dual-circulation development pattern proposed by China will clearly provide strong support for the global economic recovery. This is not only an inevitable choice for China’s economic development at the current stage but serves as an effective response to the changes in international economic development during the pandemic.
On November 4, at the Opening Ceremony of the 3rd China International Import Expo, President Xi Jinping once again emphasized that, “the new dual-circulation development pattern is never a closed domestic cycle, but a more open international one, which fully demonstrates China’s open attitude and willingness to share its huge market with other countries. China has a population of 1.4 billion with more than 400 million middle-incomers, which is making China the world’s largest market. In the next 10 years, China is estimated to import more than 22 trillion U.S. dollars of goods. The continuous development and maturation of the Chinese market will generate huge purchasing power, which will harness both domestic and international economic development. Under the new development pattern, China has to create a market-oriented, rule-of-law, and internationalized business environment. China’s active promotion of the high-level opening up will surely add impetus to the recovery and growth of the world economy”.
Fourth, the continuing advancement of East Asia cooperation is for the common interest of countries in the region.
According to the forecast of the International Monetary Fund, East Asia is expected to become the only region in the world that achieves positive economic growth this year. This is related to not only the prevention and control measures taken by the East Asian countries but also the trading pattern in this region.
According to Chinese statistics, in the first three quarters of this year, the trade volume between China and its neighboring countries has either substantially increased or basically remained the same.
For example, China’s trade volume with ASEAN countries reached 481.8 billion U.S. dollars, with Japan reaching 229.8 billion U.S. dollars, and South Korea reaching 207.2 billion U.S. dollars. The figures reflect the resilience and huge potential of economic and trade cooperation among East Asian countries.
Looking into the future of the post-pandemic era, East Asian countries should adhere to open development, strengthen scientific and technological cooperation and industrial division of labor, and promote the quality of the industrial and value chains.
Meanwhile, all countries should improve the effective multilateralization according to the Chiang Mai Initiative, promote the signing of the Regional Comprehensive Economic Partnership Agreement (RCEP) within this year, and expedite the negotiation process of the China-Japan-Korea Free Trade Agreement.
Through building a high-level regional free trade network, we can maintain the steady growth in the East Asia region.
In conclusion, I want to emphasize that the COVID-19 pandemic is a major test for the international community, which is not just about pandemic prevention policies, but also the wisdom of decisive global governance.
It is my fervent wish that through today’s open discussion, more consensus will form on the basis of practicing multilateralism and building an open world economy, and more countries will play a constructive role for human society to move forward from the impact of the pandemic.
Thank you very much!
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