Distinguished Heads of State and Government,
Fellow Heads of International Organizations,
Ladies and Gentlemen,
First, I wish to congratulate China on the success of the 2nd Belt ad Road Forum for International Cooperation. “Cooperation” is the key word in an ever more interconnected and interdependent world. As the representative of the World Economic Forum, the International Organization for Public-Private Cooperation to improve the state of the world, I wish to share some of my thoughts.
We are living in an age of astonishing change. The Fourth Industrial Revolution is rewriting business models and is having a great, and often even disruptive, impact on our economics and societies. Climate change has become a paramount challenge for humankind. The global order built after World War II is under threat, despite having provided us with relative peace and stability over the last decades. The rise of China and other emerging countries is reshaping the global power structure. Globalization and the multilateral system, which has been such a driver for global prosperity, is seriously put into question.
Two facts to illustrate how much the world is changing: Next year Asia’s economies will account for more than 50% of global GDP – adjusted for purchasing power. This year for the first time, emerging and developing countries will account for a larger share of global GDP than developed economies. China has played a pivotal role in contributing to the increasing of global wealth through its opening up and reform policies. When I visited China for the first time 40 years ago, its global GDP share was less than 2% – today China accounts for close to 20%.
The message is clear: we need an updated approach of how we manage our global interdependence. We could call this approach Globalization 4.0.
Those who are avid students of history recall that the origins of Globalization - Globalization 1.0 - go back to the ancient Silk Road and the vast networks of global trading systems that carried finished goods and commodities to markets everywhere.
The next wave, Globalization 2.0 was closely tied to the first Industrial Revolution, led by the U.K. and then later by the USA, where production methods spurred the age of mass production, mass consumption, and mass transportation.
The next wave of Globalization – Globalization 3.0 - was driven by the institutions and mechanisms we built after World War II with the objective to establish a rules-based system of global economics and financial interaction. This open multilateral world drove the spread of ideas and reshaped supply chains through shifting centers of production.
If we want Globalization to continue as a positive force, we must now move to a higher level of Globalization – I call it Globalization 4.0 - to respond to the needs and realities of a transforming world. The Belt and Road Initiative can and should be a building block and a role model of this advanced and enlightened concept of global cooperation.
Globalization 4.0 must live up to three principles.
First, it must be more sustainable. We only have one planet to support all human life and our current economic models are doing potentially irreparable damage to our environment. China’s leadership and continued commitment to the Paris Climate Accord and it’s hosting of the Biodiversity Summit in Kunming next year are essential to the world advancing solutions to address this challenge.
The World Economic Forum is also making a contribution by launching the ‘Green BRI Investment Principles’ to guide more responsible and sustainable investments along the Belt and Road.
Second, Globalization 4.0 must be more inclusive. The current attacks on globalization particularly in the western world are largely a result of the staggering wealth gap and increasing income inequalities.
In an era of modern mass communication, there is a stronger sense of social justice emerging, where nobody globally or nationally should be left behind. Both domestic and international social stability require a greater focus in policy making on inclusive development as our destinies are increasingly interconnected.
Here again, the Belt and Road Initiative can play a key role fostering prosperity through the promotion of infrastructure and connectivity, key drivers for economic development and social progress.
Third, Globalization 4.0 must be collaborative. It must be respectful of diversity and accept that different nations have different approaches to development and different concepts of the way in which their economies should be managed and their societies should be governed. But those differences should not stop us from looking for common solutions for common challenges. The world needs not less – but more globalization since national challenges will be ever more globally interlinked in the age of the Fourth Industrial Revolution.
In all respects, it seems that China is playing a central role in shaping Globalization 4.0 and the Chinese concept of ‘TianXiaYiJia’ (everyone belongs to one family in a united world) is one that I find particularly relevant. No entity embedded in a network can think of itself in isolation. The actions of one necessarily affects others and “the interests of others must be accommodated while pursuing one’s own interests” In Davos in 2017, President Xi spoke of a “community of shared destiny” as the driver for the new era of globalization.
China has a special responsibility. Through organizing and leading an increasing share of the global value chains, China shapes a new economic world order. Through the Belt and Road Initiative and institutions like AIIB, China can demonstrate the world that the philosophy and concept of the Belt and Road is more than an important initiative. It can become a shining model for Globalization 4.0: more sustainable, more inclusive, and more collaborative.