In the current context of Covid-19, the world needs to explore new engines of economic growth, new ways of social life and new ways to facilitate cross-border trade, said Xi Jinping, President of the People’s Republic of China, in his opening speech at the forum in Davos, Switzerland, organized by the World Economic Forum.
“We need to keep supply chains safe and smooth and promote a steady and strong global recovery,” he said at the event taking place remotely from January 17-21.
The official also warned about the relevance of developed countries moving towards an orderly monetary normalization.
“If developed economies hit the brakes or make a u-turn in their monetary policies, there would be serious negative side effects,” he said. “They would present challenges to global economic and financial stability, with developing countries bearing the brunt,” he added.
At the end of 2021, the United States Federal Reserve began its process of gradual withdrawal of monetary stimuli. The program implemented after Covid-19 consisted of the purchase of 120,000 million dollars per month in Treasury bonds and mortgage-backed paper.
The withdrawal, which began in November, is progressing at a pace that will conclude in March 2022. Some international observers expect that, once the purchase program is over, interest rates, which are now close to zero, will begin to rise. .
On the other hand, the European Central Bank (ECB) also began the gradual withdrawal of an asset program, although it strengthened another.
The ECB announced in December the end of the bond purchase program (PEPP) from March 2022, while it will temporarily boost its conventional asset purchase program (APP).
Until now, the European organization buys 20,000 million euros per month under this program, but between April and June it will increase them to 40,000 million. Looking ahead to the third quarter of 2022, it will cut them to 30,000 million and from October purchases will once again stand at 20,000 million euros per month.
Xi Jinping added that “economic globalization is the trend of the times.” And he said that countries must uphold true multilateralism. “We must remove barriers, not erect walls. We must open, not close. We must seek integration, not decoupling.”
For this reason, he said, “we leaders must guide the reforms to defend the multilateral trading system.”
He warned that the world’s poor population has increased by more than 100 million.
“Regardless of the difficulties that come our way, we must adhere to a people-centered development philosophy, place human development at the center of global macro policies, fulfill the United Nations 2030 Agenda for Sustainable Development, and build greater synergy among existing mechanisms to promote balanced development around the world,” he said.
He also called for discarding the Cold War mentality, seeking peaceful coexistence and win-win outcomes.
“History has shown time and time again that confrontation does not solve problems. Protectionism and unilateralism cannot protect anyone,” he declared.
He commented that economies should seek mutual development and that China remains open to reforms. “China will remain committed to reforms and opening up,” he concluded.