There Is No Path to Global Growth and Prosperity Without China, Standard Chartered's Viñals Says
Yin Fan
DATE:  Apr 23 2024

(Yicai) April 23 -- The world needs China, and China needs the world. There is no path to global growth and prosperity without China, José Viñals, Group Chairman of UK financial services firm Standard Chartered, told Yicai in a recent interview during his visit to Shanghai. Just over the past 13 months, this is his 7th visit to Mainland China and Hong Kong.

The strategy that Chinese authorities are executing is appropriate, said Viñals, who was previously serving as the Financial Counsellor and Director of the Monetary and Capital Markets Department at the International Monetary Fund, prior to his current role at Standard Chartered. 

Viñals said he has tremendous confidence in China's policy-makers doing the right things to keep the Chinese economy on track which will provide opportunities to every business in the country and to international banks such as London-based Standard Chartered.

Excerpts from the interview are given below:

Yicai: Has China’s economy peaked?

Viñals: I don't think so, and this is good news for China and for the world because China is a big contributor to global growth.

China has been able to grow by 5.2 percent last year. And this year, the government’s target is 5 percent. Standard Chartered forecasts growth to be very close to the target. This is something which is good, very good. For the medium and long term, in spite of some of the challenges that have been mentioned, I have tremendous confidence in Chinese policymakers doing whatever is right in order for the Chinese economy to keep growing and to promote high-quality development, which will be a source of tremendous opportunity for every business in China, including international banks like ours.

Yicai: Do you think new quality productive forces are the right answer to China’s economic problems?

Viñals: Yes, I think that productivity and talent are keys for China. You have to invest. You have to continue developing human capital. That innovative culture, cultivating these new economy sectors, these new sorts of high-quality productive forces, are critical for China to continue to advance, especially when the demographic contribution to growth is going to be negative rather than positive.

So having government policies, which are oriented towards new economy sectors and, as I mentioned, facilitate the transition of traditional sectors, is extremely important. And that being the case, as I said, I'm confident, very confident that China will continue to grow significantly and provide great opportunities for every foreign investor coming into China.

Yicai: What should we do now to keep China’s economy stable?

Viñals: The strategy that Chinese authorities are executing is appropriate. You have some specific interventions to address the issues in the housing sector so that over time, you provide a flow. Then you let the sector sort of basically resolve its problems and then afterwards stabilized. There are also some measures regarding the equity market.

So these specific policy actions are very important. Beyond that, you have the broader monetary and fiscal policy framework, which is supportive of the attainment of the growth targets in, for example, this year. And then over the medium term, putting the focus on the dynamic role of the private sector and on dynamising state-owned enterprises. Then putting in place the conditions for domestic and foreign investment to contribute to the transformation of the economy. I think that's critical.

Yicai: Has globalization peaked?

Viñals: No, globalization will go further. Globalization certainly has not peaked. What we must acknowledge is that now there are forces which are leading to a globalization which is in transition. Globalization is changing by nature, and we need to make sure that globalization is perfected, not abandoned. So globalization needs to be perfected because it needs to be more inclusive. It needs to be more sustainable.

Yicai: Is it possible for the world to have globalization without China?

Viñals: Short answer, no. There is no path to global growth and prosperity without China. The world needs China, and China needs the world. This is why the continuing opening up of China is so important for China, but also is very important for the world. 

This is because China is providing the world with solutions to drive in a more sustainable manner, to produce more renewable energies as well as to transition to net zero in a more feasible and fast manner. So it's a win-win. Globalization was a win-win in the past, and it needs to be a win-win in the future. So for those people who say, let's deglobalize, let's write China off, this is not possible.

Yicai: Maybe there are alternatives like India.

Viñals: I think India can contribute more towards globalization, and that would be good for India and for the world. But that doesn't have to be at the expense of China. The world needs both. In fact, the world needs everybody. This is not a zero sum game where if you do better, I do worse. It is that we can all do better together.

Video Editor: Zhang Yangyang

Editor: Kim Taylor

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Keywords:   José Viñals,Standard Chartered,globalization