New Silk Road: Trade and Investment Perspectives for EU and New Partnerships – Global Value Chain Model of China

Globalization And China

The Davos World Economic Forum Annual Meeting 2016 conclusions were that inclusive growth is a big global challenge, and the rising of income inequality was apointed as a cause for economic and social problems, from low consumption to social and political unrest. Participants referred that several years after the 2008 crisis, the world economy was still struggling with slow growth, the labor market was showing a mismatching, with a need of 500 million jobs till 2020 for unemployed people around the globe and at the same time a shortage of skilled people that the businesses were looking for. International trade and investment were considered vital drivers for economic growth.

In his Davos Forum2017 speech, President Xi Jinping recognized that “The global economy has remained sluggish for quite some time. The gap between the poor and the rich and between the South and the North is widening. The root cause is that the three critical issues in the economic sphere have not been effectively addressed”. He went on to identify these three root causes as being: the lack of driving forces for global growth, the inadequate global economic governance and the uneven global development. Essaying an answer to these problems he placed China as the leader of globalization process, taking the perspective that the US is clearly initiating a protectionist movement. He affirmed “If the U.S. does take a more mercantilist route, overall the Asians and Europeans will have to combine to preserve global free trade” and he added “We must remain committed to developing global free trade and investment, (and) promote trade and investment liberalization,”. He assumed that globalization has problems and threats, however he also mentioned the positive aspects saying “China has not only benefited from economic globalization but also contributed to it. Rapid growth in China has been a sustained, powerful engine for global economic stability and expansion”.