(Yicai Global) Feb. 17 -- Investors have been closely watching the Chinese government's measures to fight against the novel coronavirus pneumonia as the epidemic's spread enters a key phase, and China must hew to the further opening up which has been its magic sword in winning its swift economic growth over recent decades, James Bacchus, former chief judge of the Appellate Body of the World Trade Organization, said in an exclusive interview with Yicai Global.

Yicai Global: China announced on Feb. 6 it will cut an additional around USD75 billion in tariffs on goods imported from the US. In your opinion, does this move have anything to do with the novel coronavirus pneumonia outbreak?

Bacchus: It's always good news when tariffs are cut. This increases the chances of economic growth. We can hope that both China and the United States will remove them as soon as possible.

YG: How will the epidemic affect global trade? 

Bacchus: World trade is slowing generally, and anything that slows world trade even more is going to make the situation worse. The coronavirus appears to be slowing the Chinese economy. The Chinese economy is connected in many ways to the overall global economy, and that can only have a negative impact on world trade.

YG: What will be the epidemic's impact on global value chains?

Bacchus: This is one of the reasons why I continue to be cautious because I think we are seeing a fraying of the global value chains that connect China with the rest of the world economy, including the United States. US Federal Reserve chairman, Jerome Powell, warned the Congress of the United States earlier this week that the virus sweeping China could broaden economic risks [and] similar sentiments [are coming] from the World Bank and IMF. We are seeing some consequences now in global markets and in particular the virus has generated economic turbulence that is negatively affecting global commodities markets, disrupting supply chains throughout the world.

YG: What policy mix China must take to overcome difficulties from the epidemic?

Bacchus: I would say that they should continue with the reform and opening up that has done so much to increase prosperity for the Chinese people in recent decades. Most of China's economic growth has come from freer trade and a clear market orientation in the Chinese economy. I believe those are the sources w[from] here China's future growth can originate. Continuing on the course of reform and opening up is the best path for China to ... climb up the economic ladder to become a fully developed country.

YG: What kind of international cooperation do we need for now?

Bacchus: When so many countries seem to be retreating from international cooperation, I am strongly of the view that we need more international cooperation. Cooperation is needed in many branches, certainly economically, but also environmentally. To me, the overwhelmingly most significant issue the world faces is addressing climate change. I don't believe that humanity can do all that must be done to climate change without international cooperation. And I don't believe international cooperation against climate change will succeed unless China and the United States are working closely together and leading the world.

Editors: Dou Shicong, Ben Armour