4．New Impetus of Globalization and New Structure of World Economic Governance Exhibits China's Leading Role

Through the introduction of major strategy represented by “The Belt and Road” Initiative and further actively promoting international trade and investment, China is expected to play a key role in promoting globalization from weak to strong. “Chinese style globalization” will be distinctly different from “American style globalization”. The former's core features are emphasis on development and the importance of infrastructure and basic industry. In the process of promoting the growth of world economy and globalization, the promotion of “weight” also determined the strengthening of China's role in promoting the reform of world economic governance structure. In fact, in the process of adjustment and evolution of global economic governance structure after the financial crisis, China is marching on the stage. Meanwhile, China is also experiencing the transition from “passively accepting rules” to “actively making rules”.

New Impetus of Globalization: from American Style to Chinese Style

As for global and China's economy, after the financial crisis, the “train” of globalization needs new power source, and the “orbit” of world economic governance needs improvement. Concerning the present scale and stage, China's economy needs to lead globalization in order to promote China's development and world prosperity. Indeed, with the release of “The Belt and Road” Initiative and the upgrade of the “going out” strategy, China was actively promoting the globalization from weak to strong. Accordingly, significant opportunities for development emerged in the world, and countries that were “marginalized” in the last wave of “mighty globalization” were expected to benefit greatly. China's promotion of globalization was undoubtedly the continuation of the original wave of globalization. However, as it is clearly different from “American style globalization”, China pays high attention to development, which will become China's leading ideology. Looking forward to the future, China's economic status in world economy will continue to increase, and its transition and upgrade of the huge market potential release will become an important driving force for world economic growth for a long time. From the “world factory” to “world market” and “world bank”, China's development will bring great opportunities to many countries in the world and thus covering a large population, in trade, investment, financing and other fields.

China's leading role in globalization. One of the important reasons why the wave of globalization after the financial crisis changed from strong to weak was that its leaders, the United States, suffered from serious setbacks in the crisis, which made it difficult to continue to promote the pace of globalization of world economy. In the new international political and economic pattern, China is pushing forward globalization with an unprecedented positive stance. It should be said that China has obtained the ability to play a leading role in globalization in terms of economic size, scale of trade and foreign development financing. More importantly, China's growing foreign investment and allocation of financial assets in a wider field and scope are transforming this potential into reality. In this regard, China's national strategy, based on the great vision and pattern, is undoubtedly an important booster. As a “by-product” of the rapid growth of the economy in the “mighty globalization” era, China had “surplus” in the two aspects of: industrial productivity and foreign exchange assets. If the “two surplus” from the supply side (or output) determined the economic rationality and necessity of the upgrade of China's “going out” strategy, China's “two aspects of experience” in infrastructure construction and industrial development determined its feasibility. These two aspects of experience are an important part of the “China mode”, which are worthy of reference for other developing countries. It can be said that along with China's output of capital and capacity, there are also experience of China's development, especially in infrastructure and industrial fields.

Let us have another look at the demand side (or the input side). In the “mighty globalization” era, the allocation of resources was optimized globally, bringing huge welfare increments, but the distribution of resources among countries and countries was uneven. From the perspective of developing countries, many countries did not catch the “global flight” to achieve economic take-off; some countries benefited from globalization but were largely confined to the production and export of natural resource. Globally speaking, a common challenge for low-income countries was industrial capacity building, especially how to get rid of dependence on natural resource through industrialization and achieve diversification and modernization of economy. These countries still face severe challenges, including insufficient funds, inadequate domestic capital, inadequate financing for international development, limited technical and human resource and inadequate infrastructure. It was clear that China's funding, capacity, technology and infrastructure solutions provided hope for these countries.

Nowadays, in the 21st century, the geographical significance of the Silk Road is not important any more. However, Chinese government pushed forward the jointly construction of the “Silk Road Economic Belt” and the “Maritime Silk Road in the 21st Century”, which led again to our vision of the spirit of the Silk Road, which included peaceful cooperation, openness and tolerance, mutual learning and mutual benefit for win-win. “The Belt and Road” Initiative, involving economic, diplomatic and investment and development planning, is an ambitious national strategy and international cooperation agenda. By implementing opening up, reforms investment and trade in China and other countries, the policy reflects the upgrading of China's strategy of opening to the outside world and the overall economic development strategies. Globally speaking, a major opportunity for development is emerging, which is reflected in the potential of capital to invest in development, the scope of industrial and economic activities, as well as the extent of possible impact. From the perspective of infrastructure construction, with China as the “pivot”, the interconnection between Asia-Pacific regions and the whole world will be rapidly enhanced, which will play an important role in promoting globalization. From the perspective of industrial upgrading and sequential development, a “wild goose team” led by China is expected to take shape, covering not only Asia, but also Africa and Latin America.

China's push for globalization is different from “American globalization”. The leadership of a dominant country derives from its economic strength, especially its massive import and capital export capabilities. The contrast of economic status of the United States and China can be shown firstly in economic scale, and secondly in international trade, investment and finance. The trade aspect can be mainly presented in import volume, the investment aspect mainly in foreign direct investment, and the financial aspect mainly in international securities investment and capital lending. In terms of capital lending, the scale of financing for development is particularly important, and the scale of international official assistance is also worth reference. The route of “The Belt and Road” Initiative involves 60 countries, with total size of investment possibly up to USD 6 trillion. Its leading role in international trade, development financing and infrastructure construction are huge. Undoubtedly, it will make China become a key impetus of globalization from weak to strong.

Obviously, from the leaders of developed countries to those of emerging markets, the source of driving force of globalization sequently shifted. Such shift is not exclusive. In other words, while promoting the recovery of the world economy, China and the United States might jointly promote the arrival of a new wave of mighty globalization. However, the domestic political structure after the 2016 election meant that the United States had no intention of continuing to play a role in globalization, in stark contrast to China's positive posture. In fact, China's globalization is, to some extent, a continuation of the original wave of globalization, but with a distinct difference. Unlike the dominance of financial capital in “American style globalization”, the globalization promoted by China places more emphasis on substantial economy. If the United States-led “mighty globalization” era was oriented to finance and complemented by substantial economy, the future wave of globalization led by China will be centered by substantial economy, especially in infrastructure, basic industries, etc. . In the field of finance, development finance led by official institutions will play a critical role different from “American style globalization”, which is led by private capital and commercial financial institutions;meanwhile, the driving of development financing will be supplementary to infrastructure construction and basic industrial development.

The formation of globalization had its thought basis. If we mentioned that the early wave of globalization in the 19th century advanced by the Industrial Revolution and the colonial expansion push was based on liberalism thought, the wave of globalization that gradually went towards the climax after the end of the Cold War was based on the new trend of liberalism thought, the globalization promoted by China will be accompanied by a new drive of idea, “developmentalism”. “Development is the absolute principle” was endowed with new connotations in China, with the importance of sustainability and inclusiveness on an unprecedented rise. With the joint output of capital, capacity, and development experience of China, this concept is optimized and expected to be recognized by more low-income countries.

From Washington Consensus to Beijing Consensus. The proposition of Beijing Consensus firstly appeared in 2005, reflecting the international recognition of China's economic system and development mode and the reflection on the Washington Consensus led by new liberalism. After the global financial crisis, with the enhancement of China's role in promoting economic globalization, it is necessary to bring up again the Beijing Consensus and provide a new meaning to it. Especially in recent years, with the upgrade of China's “going out” strategy and the release of “The Belt and Road” Initiative, newly established international financial institutions successively started up, which made it increasingly necessary for China's development experience to be summarized and popularized. It is obvious that the relevant government agencies, think tanks and international institutions will play an important role in the extension of “China mode” and the sharing of “China's experience”.

The so-called Washington Consensus was actually the consensus about macro economic governance of Washington-based U. S. government agencies (the US Department of State and the US Department of Treasury), the Congress, the Federal Reserve, related think-tanks, as well as world financial institutions (the World Bank and the International Monetary Fund (IMF)). Undeniably, the Washington Consensus had sufficient theoretical basis and practical policy value; however, its policy and proposition did not fully consider the reality of developing countries, neither considered institutional changing process and planning, nor provided sufficient policy flexibility. A major problem was to consider the problem of poor countries on the stance of rich countries. The advice of studio-typed economists often did not make in-depth reflection on the effectiveness of the ideal system mode under specific national conditions, neither considered the difference between the superficial system and the actual one (or “hidden” and “obvious” aspects of the system factor), neither considered the cost of institutional change and uncertainty (or transition from reality to so-called ideal status). It happened to both the “shock therapy” proposed by Russia and transition economies and the “structural adjustment” implemented in many developing countries.

Beijing Consensus will solve these problems and provide more effective and flexible policies for economic development. The experience of East Asia, including China, was the practical basis of these policies. Some of China's development modes are closely related to China's special national conditions with certain particularities. Some of them are general and worth reference for other developing countries. The latter mainly includes: macroeconomic stability, reform progressivity, opening strategy of economic entities superior to the finance, export-oriented economy jointly driven by trade and foreign investment, preferring infrastructure as well as emphasis on industrial development.

New Structure of World Economic Governance: China's Bretton Woods Hour?

With China's going across the threshold of middle income countries, China's development went through the middle stage. Admittedly, the rapid rise of China over the past 30 years was in the economic order dominated by western countries. However, the order itself faced internal challenges, with less support for the development of China. The world economic governance system centered by the Bretton Woods System established after WWII covered trade and investment, monetary finance, development financing and other fields, all of which pushed forward the evolution of globalization. The problem of the system, however, emerged as the global financial crisis broke out. There are many directions for reform and improvement of either stocks or increments in terms of rules or institutions. As a matter of fact, institutions are often the makers and keepers of rules. Although the international community has not yet reached a consensus on how to establish a new global economic governance system, a positive change is taking place. China's status in the world economic governance has increased significantly. Meanwhile, China has clearly put forward the goal of enhancing the “institutional discourse power” in its development strategy.

Changes in the structure of the world economic governance. As for international trade, the Doha Round Talk made no achievements for years. In the face of the predicament in multilateral trade system, the main trade bodies found a new path and promoted the construction of China's Free Trade Areas at regional and bilateral levels. It was the deviation from multilateralism to some extent and also the threat to the multilateral trade system. In financial stability, food security, energy security and environmental-friendly society and other fields. The global challenges remained severe instead of abating due to economic globalization. The Bretton Woods System, characterized by the fixed exchange rate, eventually collapsed in 1973 as the US dollar crisis broke out. The implementation of the floating exchange rate system seemed to open the Pandora box of financial turmoil. Since the 1980s, developing countries have gone through rounds of monetary and financial crises, which have seriously affected their economic development. The outbreak of the global financial crisis and the subsequent European debt crisis meant that the root causes of the financial and debt crisis shifted from developing countries to developed countries. The huge “black hole of funds” meant that the original institutions represented by the IMF were unable to effectively prevent and respond to global financial risks. It is undeniable that the traditional multilateral financial system has played an important historical role, but it is unable to adapt to the new historical conditions. How to improve the prevention mechanism of the financial crisis to solve the problem of financial stability that perplexed the world economy for a long time and avoid the recurrence of the large-scale financial crisis is one of the core issues of the restructuring of the global economic governance structure.

As early as in December 2010, the IMF approved the proposal of reform on share and governance. However, because the U. S. Congress had not approved the program, IMF reform had been unable to achieve. The U. S. Congress finally gave the green light to it in December 2015, and the IMF reform program came into effect in January 2016. Subject to the newly effective amendments to the agreement, the IMF's permanent capital resource was doubled to 477 billion SDR (about USD 659 billion). China's share of voting power increased from 3.8% to 6%; meanwhile, Brazil and India became among the top ten members of the IMF. As the world's second largest economy, China previously had only sixth voting rights in the IMF, ranking after the United States, Japan, Germany, France and the United Kingdom. However, we must see that the calculated share in accordance with the “quota formula” share did not fully reflect the status of the economy of China, which accounted for 13% of global economy, (up to 17% on the basis of PPP) but its share occupied only 6% in the IMF. Meanwhile, the voting power of the United States still occupied 16.5%, and continued its exclusive right of “one vote veto”.

The global economic governance structure has also undergone some other positive changes. The upgrade of the group of twenty countries (G20) meant the establishment of the international economic policy coordination system with wider representative features, and also reflected the relative rise of the status of emerging economies. G20 included major developed and emerging economies, covering nearly 70% of the world's population and nearly 90% of world economy. G20 was established after the Asian financial turmoil in the late 1990s. Its main events included the meeting of finance ministers and central bank governors of the twenty countries. Since the outbreak of the global financial crisis in 2008, G20 began to host the summits of leaders, and thus replacing G8 as the most important forum for global economic cooperation. Because of the non-binding mechanism, the informal nature of the G20 summit has not changed. However, its positive role in improving world economic governance and strengthening macroeconomic policy coordination is worth expectation. With the evolution of the global economic situation after the financial crisis, the focus of G20 has gradually shifted from crisis response to growth promotion. How to drive the global economic recovery has gradually become a major issue for G20. In 2016, China, as the presidency of G20, promoted G20's remarkable progress in this regard. At the Hangzhou summit, the emphasis was placed on innovative growth methods, and pragmatic and effective China's programs were proposed to address the outstanding problems facing the world economy.

The cooperation among BRICS countries began in 2009. With the establishment of summits and other mechanisms, the BRICS gradually became a national group concept and exhibited similarities with the G7 mechanism. What is more important, cooperation among BRICS countries has gone beyond mere policy discussions and coordination, and has begun to involve substantive areas such as development financing and financial stability mechanisms. Through the BRICS cooperation mechanism, important emerging economies united and spoke with one voice, and became an important force to guide the improvement and development of world economic governance structure. It is obvious that the goal of BRICS cooperation is not only economic but also political, which is reflected in the demands of all the parties to establish a “fair, democratic and multipolar world order”. Although the political cooperation between the BRICS is still at an early stage, its great involvement in economy, geography and demography has provided itself with important geopolitical impact. Of particular note is that the increasingly deepening of international cooperation between BRICS countries has made the BRICS countries representatives of emerging markets and is expected to contend in international arena against G7, the club of developed countries. The total GDP of the BRICS was USD 15.8 trillion in 2013, equivalent to 46% of G7. Including Mexico, Indonesia and Turkey, the major emerging economies are called “E8”, the economic aggregate of which are equivalent of more than half of G7.

Although “G2” is not a widely accepted concept, the Sino-US bilateral dialogue mechanism is worthy of concern. Its establishment and development can also be regarded as part of the evolution of the world economic governance structure. In 2005, the “China-US strategic dialogue” mechanism was established. In the next year, the strategic economic dialogue between China and the United States started. After the 6 rounds of strategic dialogue in military and security and the 5 rounds of strategic economic dialogue, the Sino-US strategic and economic dialogue mechanism was established in 2009, with issues of economy, security and strategy included. After that, the high-level consultation mechanism between China and the United States was established in 2010. After the re-integration in 2017, the four high-level dialogue mechanisms of diplomatic security, comprehensive economic issues, law enforcement and cyber security, as well as social and cultural issues came into being. In the change of Sino-US relations after the US presidential election, how the new mechanism can play a stabilizing role is worthy of expectation.

Momentum of regionalism and globalism. There are two kinds of views on the theories on reform of world economic governance structure. One holds that the current economic governance structure is still firmly established on national basis. The contradiction between the structure and international economy and various global issues decided that the focus should be put on strengthening governance at global level. The other one believes that it is imperative at the moment to recover part of the policy space engulfed by globalization and to provide countries with more right to control over their choices and future development. The “regionalism” represents the “third way” and reflects a compromise tendency. In fact, the “regionalism” trend after WWII deeply influenced the practice of international economic policy. With the establishment of European Union and the North American Free Trade Area respectively in 1993 and 1994, the influence of “regionalism” once reached the climax. With the earliest and most advanced integration, the European Union was an outstanding representative. However, owing to its rapid expansion eastward, the shortcoming of the system design and the great differences in political integration occurred to it, which made the European Union come to an end in the traditional integration.

After the global financial crisis, “regionalism” found another way to rise again. It was both continuation of history and comprehensive innovation. From the point of view of the characteristics, the “regionalism” wave after the crisis had unique feature, which I called it “new regionalism”. Its rise reflected the fall of globalism, and also the practical requirements of promoting international economic cooperation between countries at regional, multilateral and bilateral levels in the context of the subduing of globalization and multilateralism. It embodied the selection of the strategy of “having no alternative but giving up the first preference”. In the field of trade, the negotiations started up on the “21st Century trade agreements” of the Trans-Pacific Partnership Agreement (TPP), the Transatlantic Trade and Investment Partnership Agreement (TTIP) and the Regional Comprehensive Economic Partnership Agreement (RCEP). In the field of international finance, the emergence of new multilateral financing institutions also meant the breakthrough in the new governance structure at regional level.

In 2016, the British referendum for Brexit and the U. S. presidential election led “regionalism” to major setback. On the one hand, the EU, as the representative of the traditional regionalism, suffered from unprecedented frustration because of the Brexit after British referendum, and the North American Free Trade Area was also confronted with re-negotiation; on the other hand, after Trump came to power, he pronounced “death penalty” against TPP and also made TTIP exist only in name, which wasted previous efforts made by the former government for years. Obviously, nationalism prevailed in encountering multilateralism and regionalism. Not only the “new regionalism” was weakened, “multilateralism” and globalization based on it was also facing a counter current.

Overviewing the situation after the U. S. presidential election situation in November 2016, isolationism and protectionism were the major “label” for the elected President Trump's concept of economic policies, and industrial production and capital flow became an important starting point of the practice of his economic policies. He claimed to impose taxation on the enterprises that moved their manufacturing activities outside the USA and sold their products back to the USA, which put the global value chain into chaos and distorted international trade. In addition, as part of its tax-cut policies, Trump also proposed to reduce the tax rate to 10% of the U. S. enterprises which had their capital transferred to the United States, so as to drive the massive return of funds. What's more, he threatened to introduce policies that deviate from the WTO rules. Trump's efforts to “make America great again” are based on the ideological base of economic nationalism, The occurrence of the “revolution” is not accidental, but a new political symptom of the economic sequela caused by the sustaining financial crisis in 2008, and also the result from the “flaw” of serious imbalance of globalization between expansion and stability, efficiency and fairness, reflecting the political reaction to some long-standing economic problems that were generally ignored. It is obvious that this reaction is irrational and possibly destructive.

China changes from accepting rules to making rules. By advocating new institutions, leading new agendas, and influencing new rules, China's role in international economic governance is changing from a “rule taker” to a “rule maker”. In October 2015, in the Fifth Plenary Session of the 18th CPC Central Committee, “the improvement of our country's institutional discourse right in global economic governance” reflects such change. In order to improve the institutional discourse right, China needs to start from the aspects of organization, procedure and rules, involving the two directions of stock reform (adjustment of original mechanism) and incremental import (introduction of new mechanism). As for international trade and investment, China actively promoted liberalization at bilateral, regional and multilateral levels. At the APEC summit in November 2014, the proposition of “Beijing roadmap” was approved, which made the Free Trade Area of the Asia Pacific (FTAAP) the ultimate goal of regional economic integration. Under the initiative of the Chinese side, the G20 trade minister's meeting held in July 2016 realized the relevant mechanism, and had the G20 Global Trade Growth Strategy and the G20 Global Investment Guiding Principle approved with important results. In financial sector, under the circumstance of poor reform at global level, financial security, development financing and other mechanisms at regional level showed a rapid growth under the guidance of China.

Especially in the field of development financing, China has begun to play a leading role. Compared with the huge financing needs, the original system appeared insufficient in the size of funds and the ability to lend. In addition, the stringent requirements of original institutions in financial rescue and loan provision, namely, conditionality, were criticized. Apart from the multilateral channels, bilateral ones became a new growth point, with China as one of the main players. It was estimated that the balance of overseas outstanding loans of the National Development Bank and the Import and Export Bank reached USD 684 billion at the end of 2014, almost equal to the total amount of that of the existing multilateral and regional development financing institutions. More important breakthrough was reflected in incremental adjustment. New international development financing institutions were successively established upon China's promotion. The NDB(New Development Bank) and AIIB (Asian Infrastructure Investment Bank), both with initially authorized capital up to USD 100 billion, became important emerging forces in international financial sector. The process of preparation for AIIB showed a wonderful global economic diplomatic game. What was particularly dramatic was that Britain joined AIIB on March 12,2015, and later major western countries, including France, Germany and Italy, successively joined in it. In the end, more than half of the 57 founding members were outside Asia, and dozens of countries were lining up to join AIIB. Its broad representation and scope of obligations and its efforts in search for “globally best innovative rules” showed its potential as a “second World Bank”.

In its efforts to improve the governance structure of world economy, China faces the two complementary ways of cooperation and independence. It calls for stronger dialogue with developed countries, and also greater cooperation with developing countries, especially with other large emerging economies. The importance of BRICS cooperation is increasingly growing. Meanwhile, the scope of international cooperation among large emerging economies should also be expanded. Once the dialogue mechanisms covering countries of major emerging market, like the “emerging seven countries” (E7) or the “emerging eight countries” (E8) takes shape, they will become the strength comparable to the G7 in international political and economic arena.

Some people compared the global financial crisis in 2008 and the great crisis in 1929, while others compared the international order adjustment resulted from the crisis and the establishment of the international order upon the situation of “a thousand things waiting to be done” after WWII. In the history, the implementation of the Marshall Plan directed a great amount of American capital and capacity to Europe, and laid a foundation for the prosperity of the western world. Today, “The Belt and Road” Initiative is expected to bring China's capital and capacity into a number of low-income countries, and realize the coordinated development and shared prosperity. In the history, the Bretton Woods Conference decided to establish the IMF and International Bank for Reconstruction and Development, which described the blueprint of the world economic governance system in a white paper. Today, the establishment of new multilateral institutions have made contribution to the original governance system. It is inappropriate to say that China's “Bretton Woods moment” has arrived. However, the year of 2015 became a turning point in world economic order, while a series of political evolution of the western world in 2016 accelerated the decline of the old order.