China Development Forum, 21 March 2021

 

Remarks by Angel Gurría, Secretary-General, OECD

Paris, 21 March 2021

Vice Minister Qian, Vice President Zhang, Dear Friends,

It is a privilege to address the 2021 China Development Forum at this pivotal moment in the crisis.

The OECD’s latest Interim Economic Outlook shows that global economic prospects have improved markedly in recent months, helped by the deployment of vaccines and announcements of additional fiscal support in some countries.

We project global GDP growth to be 5½ per cent in 2021 and 4% in 2022, with global output rising above its pre-pandemic level by mid-2021. China’s rebound is even stronger, with projected GDP growth of 7.8% in 2021 and 4.9% in 2022, making China one of the main locomotives of the global recovery.

Nevertheless, apart from the tragic human toll – reaching almost 2.7 million deaths to this date – the pandemic is particularly affecting vulnerable groups and risks increasing social inequalities both within and between countries.
Against this background, open markets for trade and investment will play a crucial role in ensuring a strong recovery and resilience to shocks. We need to keep international trade and investment flowing, both to ensure the supply of essential products and to boost business confidence. Let’s not forget: openness to trade and investment has helped lift hundreds of millions of people out of poverty over the past few decades.

In the last year alone, global value chains were crucial to meeting increasing demand for key goods, despite some temporary shortages. Notably, China increased its production capacity of facemasks tenfold between January and March of last year, and exported more than 220 billion masks in 2020 – almost 40 per person living outside China!

As we recover from the pandemic and rebuild our economies, OECD advice is clear: adopt policies that facilitate trade and investment, promote fair competition and reduce red tape. Going forward, let me briefly describe some actions that we consider as particularly important.

First, in China there should be a particular emphasis on the services sector which generates over half of GDP and employs more than half of the workforce. The OECD’s Services Trade Restrictiveness Index (STRI) shows China to have been a top reformer over the period 2014-2020. For example, China eased foreign entry barriers for life insurance and consolidated its regulatory framework for foreign investments via a new law.
Nonetheless, there is scope to do more: China is more restrictive than the average in 19 of 22 sectors covered by the STRI.

Second, governments around the globe should focus on adopting domestic policies to reap the full benefits of open markets. This includes investing in education, skills, innovation, infrastructure, policies to improve the functioning of labour markets and the financial systems, effective public institutions, and stable, predictable rule of law. Governments can also reduce unnecessary costs imposed on individuals and firms, by streamlining and digitising customs procedures.

Third, it is important that businesses play their part in the recovery and ensure they are looking at their environmental and social impacts. Governments should support these practices and lead by example in their own commercial activities. The OECD and China have worked together to promote responsible business conduct and we should continue doing so.

And Fourth, international co-operation is key in helping us to exit the crisis. It is critical, for example, in ensuring equitable access to diagnostics, therapeutics and vaccines. More generally, it helps avoid and resolve disputes and establish fair and predictable rules of the game. We need to harness all international co-operation tools, whether it be legally binding agreements (multilateral/WTO, regional or bilateral), voluntary guidelines and codes of conduct, or simply shared commitments to improve policy transparency and dialogue and promote international regulatory co-operation.

International co-operation is also key to ensure that issues of technology transfer and intellectual property rights are addressed; that all businesses – no matter their ownership – adhere to high standards of conduct and governance. It also ensures labour and environmental standards are respected; cross-border tax arrangements are transparent and fair; corruption is combatted; and financial markets function effectively.

Some OECD Member countries have expressed serious concerns about China with respect to some of these issues. Many of them are addressed by OECD standards, and the OECD as a key forum for international co-operation can facilitate a constructive dialogue with China.

This has already been happening in the G20 context, where our strong collaboration with China, during its 2016 G20 Presidency, initiated a global agenda on harnessing innovation and the digital transformation and enabled progress on infrastructure, international taxation and combatting foreign bribery.

Vice Minister Qian, Vice President Zhang,

As you know, this will be the last time I participate at the China Development Forum as Secretary-General of the OECD. After 15 years and 3 mandates, I will be leaving the OECD on 1st June next. I would like to take this opportunity to thank you for your friendship and support over the years. But this relationship goes beyond the personal. The OECD and China have been engaging in a fruitful policy dialogue for over two decades and I trust this co-operation will continue and deepen in the years ahead.

Thank you.

 

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