Chinese former official defends globalization as beneficial to economies

Globalization promoted by a multilateral trade mechanism still benefits economies around the world, said a former Chinese official at the 7th Hongqiao International Economic Forum in Shanghai Tuesday.

Yi Xiaozhun, China's former vice commerce minister, made the remarks at a parallel session of the forum on the history of the World Trade Organization (WTO) and the development that China had achieved over the past decades since it joined the international organization in 2001.

Quoting a report from Bloomberg, Yi said as a promoter of globalization, China will remain the biggest contributor to global economic growth in the following years.

"China joined WTO in 2001, actively participating in this round of economic globalization and has benefited from it. A report from Bloomberg made an estimate based on the World Economic Outlook released by International Monetary Fund (IMF). It held that from 2024 to 2029, China will account for about 21 percent of the world's new economic activity, larger than those of the Group of Seven countries combined. It means that over the five-year period China will remain the biggest contributor to the world economic growth," said Yi.

The experts attending the event highlighted the significance of WTO and a multilateral trade mechanism in boosting global trade and helping developing economies to grow.

The international trade organization helped 55 developing economies, including China, become a part of the multilateral trade mechanism and the value of global goods and service trade increased from six trillion U.S. dollars in 1995 to 30 trillion in 2023, experts said.

Responding to grudges against globalization from developed countries, Yi said they are also among the multiple beneficiaries as imported cheap goods keep their inflation rates low.

"Many of the developed countries now complain that globalization is unfair to them. They said the economic globalization caused them lots of losses. I think we should be aware of the fact that the developed countries, in this round of globalization and in the frame of multilateral trade, have enjoyed low inflation rates, low costs and high efficiency. For example, cheap consumption goods have been helping keep the global inflation rate very low," said Yi.

Chinese former official defends globalization as beneficial to economies

The U.S. Federal Reserve on Thursday slashed interest rates by 25 basis points amid cooling inflation and a weakening labor market, marking the second rate cut in this easing cycle.

Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low. Inflation has made progress toward the Committee's two percent objective but remains somewhat elevated, the Federal Open Market Committee (FOMC), the central bank's policy-setting body, said in a statement.

In support of its goals, the Committee decided to lower the target range for the federal funds rate by 0.25 percentage point to 4.5 percent to 4.75 percent, the statement said.

The Fed's latest decision came after a weak employment report, which showed that U.S. employers added only 12,000 jobs in October, amid a cooling labor market. This slowdown was exacerbated by a strike and the impact of recent hurricanes.

The latest report also revised down employment for August and September, to a gain of 78,000 and a gain of 223,000, respectively. With these revisions, employment in the two months combined is 112,000 lower than previously reported.

After its Sept. 17-18 meeting, the central bank slashed the target range for the federal funds rate by 50 basis points, which marked the first rate cut in over four years and signaled the start of an easing cycle.

U.S. Fed slashes interest rates by 25 basis points amid weakening labor market