Speech

Remarks by the IMF Managing Director Kristalina Georgieva at the Opening Ceremony of the 5th China International Import Expo

November 4, 2022

As Prepared for delivery

Wan Shanghao. Good evening! I would like to express my sincere thanks to Minister Wang for inviting me to contribute to this fifth China International Import Expo.

The theme of this year’s Expo—Stimulating Global Opening-up for Shared Opportunities of Cooperation and Development—is exactly what the world needs today.

We know how much the world—and this region in particular—has benefited over the past 3‑4 decades from global economic integration. Simply put, trade has been an engine of shared growth for Asia and the world.

Yet, we are at a critical moment.

For more than two-and-a-half years, the world has been facing extraordinary challenges: a global pandemic, war in Ukraine, climate disasters on all continents. And, with it, we are witnessing record-high inflation, a cost-of-living crisis, and acute food insecurity in too many parts of the world.

And, for the first time in decades, we are seeing poverty on the rise again.

There is much that policymakers around the world can and must do to stabilize their economies.

These immediate actions are essential, but they will not be enough to ensure that economic integration—not fragmentation—continues to be the driving force for a more prosperous future for all of us.

That is why the spirit of this Expo is so vital.

We must safeguard and promote trade openness—both at home and by cooperating to build a stronger global trading system centered on the World Trade Organization.

To understand the benefits of more open and stable trade policies, we need look no further than China.

A quarter century ago, China undertook ambitious reforms, opening the economy to greater competition and innovation—which, in turn, saw rapid gains in productivity and tremendous increases in living standards. These reforms also secured China’s membership in the WTO and established China as a leading trading nation.

Today, the global trading system are under severe threat. Trade restrictions and distortionary subsidies are on the rise. A particular priority is rolling back food-related trade restrictions, which drive up global prices and food insecurity.

In other words: rather than being a source of growth and integration, trade policy risks becoming a source of economic fragmentation—which hurts all countries.

Our latest economic outlook for the region, released last week, includes a scenario that illustrates the potential costs. If the world—and our trade—were to divide into two blocs, we estimate permanent annual losses of 1.5 percent of GDP globally, with losses over 3 percent of GDP in Asia and Pacific countries, reflecting the key role trade plays in the region.

Here the global community—led by the major economies—must step up with practical and concrete actions.

For China, there is room to further open up domestic markets, deepen reforms of state-owned enterprises, ensure competitive neutrality with private firms, and further strengthen the protection of intellectual property rights.

These efforts will be good for China—for the economic wellbeing of the Chinese people—and they are good for the world. For example, reforms that would improve resource allocation between different firms in China could increase productivity by around 6 percent.

Of course, as a global economic powerhouse, China also has a key leadership role in the WTO. Together with other major economies, China can help strengthen the multilateral system. Let me highlight four priorities:

First, we need to clarify trade rules, especially by addressing issues such as agricultural and industrial subsidies.

Second, we need to conclude new market-opening agreements in key areas of the modern economy, such as digital trade and investment facilitation.

Third, we can strengthen the role of trade in fighting climate change, including through liberalizing trade in environmental goods and services.

Finally, restoring effective WTO dispute settlement will provide the policy certainty and stability needed for investment, job creation, and growth. This should be coupled with a renewed commitment to a multilateral approach: rather than acting unilaterally, governments should bring their disputes to the WTO.

Delivering on these priorities will not be easy. And instrumental as China’s leadership can be, no one country can achieve this alone.

That is why we need much stronger international cooperation, not less. And that is why we need this Expo and similar opportunities for interaction and dialogue.

Only by reaching out across borders—and bridging differences on critical trade issues—can we confront fragmentation and together build a more prosperous future for everyone.

Xie xie!