In the past 30 years up until recently, the global economy has been living a dream. And many new developing countries were integrated into this system. They learned to enjoy the fruits of this system, of the architecture, financial trade, legal system – they were actually created by the Western world. And now that they rose in their economic power, they basically compete for the same share of the pie with those who created this architecture — Timur Maksimov, Deputy Minister of Economic Development of the Russian Federation.
I think a large part of the reason why trade growth is slowing is because China is becoming more developed, so instead of exporting all of its output, there is a growing domestic market. <…> And on the input side, what was previously imported into China, China can now supply itself. <…> And because it [China] is so large, it affects global trade flow — James McCormack, Global Head of Sovereign and Supranational Ratings Group, Fitch Ratings .
With protectionism there are no winners. Everybody will lose one way or the other, touching from the slowing down of global growth to impact on business investment decision and hiring, as well as the volatility in the financial market — Paul Chan, Financial Secretary of the Hong Kong Special Administrative Region of the People’s Republic of China.
We now see the comeback of protectionism and we have the end of worldwide globalization. Now there is a new frame – regionalization. You have Asia, you have both Americas, and you have China, and of course if in Europe we are not working all together – the European continent is a bridge between Asia and the United States, the West and the East – we will be the loser — Jean-Pierre Thomas, President, Thomas Vendome Investment.
Now I think the United States looks like a main threat to this liberal economy of the world. They use the instrument of the world trade, the dollar, as a weapon, as an economic weapon against Russia, against China, even against Mexico — Alexander Zhukov, First Deputy Chairman of the State Duma of the Federal Assembly of the Russian Federation .
We had a very efficient monetary system based on the US dollar, on institutions like the IMF, like the WTO, so everything was more or less clear, understandable, and efficient. But we have a built-in contradiction – that this system is based on trust in US dollars, and we have a very huge temptation from the government, from the institutions of the United States to use this system in order to have some internal political goals, economic goals. And now we see this situation. <…> Now it has become not efficient now using US dollar accounts — Dmitriy Pankin, President, Chief Executive Officer and Chairman of the Board of Directors, Black Sea Trade and Development Bank.
It is not possible to see it now, but the long-term erosion of the dollar’s position is going to take place most probably. That is because if you use it as a political instrument then it is not on the same level of value as it was before, because it is politically defined. It is politically used, and it is certainly from my point of view in the long run very dangerous for the US position — Frank Schauff, Chief Executive Officer, Association of European Businesses.
The Trump administration has weaponized the dollar. That affects everybody in the world. That affects global trade significantly. <…> The entire global economy is always connected but when you have one or two countries that can call the shots, that can change oil prices in a heartbeat, not based on any economic rationality but because of a political decision — Peter Lаvelle, Anchor, RT .
In the new paradigm we should not forget that the institutions that make the rules are a little outdated. They came after the Second World War. You have the IMF, you have the World Bank. You have all these big institutions. But are they adapted today for globalization and now the regionalization in this globalization, and the return to protectionism? I am not sure — Jean-Pierre Thomas, President, Thomas Vendome Investment.
We need to change the real voting rights in the World Bank and the IMF. This is a real way for balanced decision-making — Mikhail Zadornov, Chairman of the Management board of Otkritie FC Bank.
You look at the growth of the global economy – it slows down, trade slows down, globally speaking. On the other hand, you have global megatrends – new ones like the digitalization that we see at the moment, and climate change. And obviously these megatrends need more international cooperation in the end, in order to be able to regulate it in a proper manner — Frank Schauff, Chief Executive Officer, Association of European Businesses.
We in Hong Kong advocate free trade and multilateralism, so that there is a division of labour and a good supply chain being built up all over the world — Paul Chan, Financial Secretary of the Hong Kong Special Administrative Region of the People’s Republic of China.
We cannot have more conflict with major trading partners. Secondly, I think it is too early to say this is a paradigm shift caused by trade tensions or a trade war. <…> Reactions from China so far have been quite measured. I think that is a correct policy response — Xu Sitao, Chief Economist at Deloitte, China.
There are some global tendencies. For example, young people want to travel, to see the world. So, in tourism, and all industries around tourism there is huge growth – 4–5% annually. And e-commerce. <…> There are some new trends which go over the restrictions of traditional trade of commodities — Mikhail Zadornov, Chairman of the Management board of Otkritie FC Bank.
We have to stop these sanctions, because now we have sanctions against Russia from the United States, from Europe. Now we have Iran, we have Japan. We have to stop this silly game — Jean-Pierre Thomas, President, Thomas Vendome Investment.
In terms of the income distribution argument that we hear a lot of – winners and losers – think of income distribution within countries and think about income distribution between countries. It is hard to argue the fact that global trade and the growth of global trade has improved income distribution between countries. But within countries we can clearly see that income distribution is getting worse, so it is not an issue for governments to coordinate with each other, it is governments’ need to address these issues on their own — James McCormack, Global Head of Sovereign and Supranational Ratings Group, Fitch Ratings .
The one domestic policy that should really be emphasized is that you are going to have to look at domestic education systems, because education systems and social protection systems are ultimately what is going to be able to maintain a reasonably open global system. <…> Yes, need to collaborate globally, we need to emphasize global institutions, but we should not spend all of our energy there. We very much need to focus on improving the domestic systems, which will make populations happier to keep the global system going as it is now — David Hauner, Head of Emerging Markets Economics & Strategy, EMEA, Bank of America Merrill Lynch International Ltd..