BRUSSELS — China has the power to lead on structural economic reform which is necessary across the globe, an European expert told Xinhua in a recent interview.
Fredrik Erixon, director of the European Center for International Political Economy said China and the other G20 members are right to call for much more structural economic reform which is necessary across the globe during the two-day Hangzhou G20 summit.
The expert said he believed that G20 summits are “opportunities for world leaders to understand each other and learn how countries react to different events.”
“China made the right call to focus this summit on growth and the need to revive innovation, productivity, trade and economic growth, but the lasting effect of the summit will probably be that leaders had an occasion to speak to each other at an extraordinary difficult time for the world economy and world politics,” Erixon said.
The world economy is in a structural slowdown, driven by falling levels of trade growth and low energy levels in most leading economies, he said.
“Many Western economies are now confronted with a bitter economic reality, which two decades of rapid trade growth had masked — their economies lack underlying strength and productivity growth has been on a downward trend for 40 years,” said Erixon.
In his opinion, the global economy is now being held up by extraordinary support from central banks and governments running fiscal deficits, “but that is not sustainable.”
Changing that direction, which requires far more innovation and economic dynamism, is not easy, and “no political leader face opinions and electorates that are desiring structural economic reforms,” he told Xinhua.
“If you add to that the risk of forthcoming elections in Europe and America to electing populists, it is easy to see how a perfect storm may hit the world economy in 2017,” he added.
The structural reform which is necessary across the globe won’t emerge because of summit discussions and communiqués, Erixon said. “The challenge is to deliver the reform, especially as they challenge incumbent interests in many countries,” he added.
“China has strong power to lead on these issues — to be an exemplar to other countries, showing that growth can be revitalized,” the expert concluded.