Economists stress inclusive models of development for deepening trade ties

Prominent international and Chinese economists and experts called for more inclusive development models to sustain globalization and deepen trade ties over the weekend.

They added the Belt and Road Initiative served as the remedy to address the growing inequality within and across nations.

Attending the 12th Shanghai Forum at Fudan University held from Saturday to Monday, the economists cited empirical studies to show that trade wars benefit no one and a more effective global governance system is needed to protect fairness and promote inclusiveness in the global economy.

The burden of a potential trade conflict between Washington and Beijing would be "unbearable" - especially for the United States - according to Yu Miaojie, deputy dean of the National School of Development at Peking University.

Yu said that should such a clash occur, real wages would drop 0.66 percent in the US and a milder 0.042 percent in China, coupled with more significant fall in welfare in the US.

"Bolstered by the Belt and Road Initiative, China's imports are projected to reach $2 trillion in five years, with Beijing poised to provide various kinds of training to tens of thousands of workforces," Yu noted.

Peter Petri, a professor of international finance at Brandeis University in Massachusetts in the US, said the Initiative would add $1.6 trillion to the global economy by 2030, by effectively reducing trade costs through infrastructure investments.

Regional integration could be an important step to forging extra regional agreements - by enabling a broader section of the population to experience the gains from trade, said Amelia Santos-Paulino, a Geneva-based economist at the United Nations Conference on Trade and Development.

"For instance, 10 percent greater regionalization through participation in or exposure to free trade agreements would lead to a 5.6 percent higher GDP per capita growth," she said, citing studies conducted in Asia and Latin America.

The trend of globalization was "unstoppable and irreversible", but a fairer and more inclusive global governance system was needed to bridge the expanding income gap among countries, said Quan Heng, deputy director of the Institute of World Economy at the Shanghai Academy of Social Sciences.

He added that because the Initiative did not set any prerequisites for participation, it would help narrow that gap by increasing international connectivity, enhancing communications and contributing to more even distribution of the global value chain.

Sheng Bin, an economics professor at Nankai University, said the Initiative will also encourage emerging forces in global trade to play a bigger role, such as small and medium-sized enterprises, e-commerce and digital trade, among others.

hewei@chinadaily.com.cn