International cooperation is indispensable to ease economic pain caused by COVID-19 pandemic

August 15, 2020 - 12:16
The trade cooperation and friendly exchanges between China and Iran will continue to deepen

The coronavirus (COVID-19) pandemic has caused nearly 20 million confirmed cases around the world. Affected by the epidemic, the world economy is at a more dangerous time than the 2008 financial crisis. The widespread recognition of economic liberalism has shaped an interdependent international society. At least in economic relations, since globalization, the exchanges and cooperation between countries have basically been mutual and been based on fair competition.

In the near past, given the confidence that comparative advantage can improve the production efficiency of the overall industrial chain at the global level, it is a general consensus among all countries that international trade and cross-border mobility of people are beneficial to the national economic development. People believe that increased mobility can stimulate economic vitality and innovation. The coronavirus pandemic may have changed all of the above. While in fact, in the future, to alleviate the global COVID-19 recession and revive the economy, international cooperation will still be indispensable.

1. In a post-epidemic era, globalism is still needed to kick-start the world economy

It should be recognized that globalization is a necessary path for all countries to develop their economies. It is already difficult for one single country to leave the global supply chain and fully achieve self-sufficiency in all production, both developing and developed countries are no exception.

The COVID-19 epidemic is changing the international order and the world pattern, the ideal world pattern in the post-epidemic era should maintain pluralism. Strategically, open and equal international cooperation is the attitude of communication between countries that effectively fight the new coronavirus and restore the economy. However, when external political risks, economic risks, and even security risks steadily increase, a healthy economic development model has to pay more attention to internal economic circulation. The global economy circulation and the internal domestic circulation complement each other, and the domestic economic cycle could be the main body of development, which means consumption and service turns to be more important compared to international trade and investment. The "dual circulation" development pattern aimed at boosting the domestic economy with pumping up demand and reducing unemployment? but also reviving the world economy.

The idea of coping with a recession in details may be hidden in technology innovation, which lies in actively looking for new methods to ensure domestic and global economies promote, such as building digital economy ecosystems.
Of course, the emphasis on domestically driving the economy does not mean abandoning external economic cooperation. After all, the close embedding of the global industrial chain far exceeds the short-sighted judgment that advocates "cutting off" between interdependent countries.

2. "The law of the jungle" in the economic sphere is neither moral nor conducive to economies reopen

When the global economic situation is smooth, free market and liberal economic models prevail. People believe that they can profit from the liberal economic model. With the current COVID-19 pandemic, trade protectionism and state interventionism tend to become increasingly prominent, and some countries are scared of competition in the context of ongoing economic recession.

The long-standing Western self-confidence in liberalism has been greatly degraded. At the social level, anti-intellectualism and populism are clamoring when liberalism is declining. Those conspiracy theories that are not supported by facts have become more and more popular, and have been used by some politicians to incite their supporters to unnecessary panic and hatred.
Helping developing countries recover their economies and eliminating the serious unbalanced development of the world economy will benefit global peace and stability, rather than maliciously disrupting other countries' opportunities of economic stability or undermining the sign of global economic revival. Fighting against the epidemic should oppose stigmatization and politicization of the virus, and global economic recovery needs to resist scapegoating as well.

3. Responsible powers are essential to boost the global economy

Governments closed their doors on oversea travelers, restricted the export of medical supplies, and limited food exports from leaving their own countries while battling COVID-19. These policies hurt people's confidence in the free trade system in a long way and even eroded the trust between allies. 
A new world order calls for more responsible powers to support each other with joint hands. When the novel coronavirus struck, China, as a major responsible country, upholding the vision of a global community of shared future, assisted other countries in containing the spread of the virus, and protected the health and wellbeing of people around the world. China also calls on multilateral organizations to increase exchange within their respective framework. Securing the global community of health and wealth needs all responsible powers' contributions to strengthen international macroeconomic policy coordination and jointly maintain the stability, security, and smoothness of the global industrial and supply chains.
Responsible major countries should ensure normal business activities of multinational enterprises that follow international market rules, abide by the laws and regulations of the host country, to preserve a healthy and fair international market order. Responsible powers are not fighting for global supremacy in chaos. Responsible powers should be responsible for the stability of secure international order, rather than deliberately provoking or spreading distrust.

4. Safeguarding diversification always meets the requirements of the times

The COVID-19 epidemic is changing the international order and the world pattern, the ideal world pattern in the post-epidemic era should maintain pluralism. Diversification does not mean fragmentation. Most developing countries, including China, always hope to maintain the multilateral trading system so as to systematically and structurally boost the global economy. When the traditional major powers become more and more isolated, emerging countries are the hope. To rebuild mutual trust in international cooperation and trade, at least Asia can lead the way. For example, the Asian Infrastructure Investment Bank (AIIB) offered loans for building member states' public health emergency management system. AIIB will offer up to 13 billion dollars of financing under the facility, and it will be a new platform that performs highly in terms of international cooperation.

Objectively speaking, COVID-19 has indeed caused some originally planned cooperation negotiations to be postponed. For example, in 2016, China and Iran established a comprehensive strategic partnership. However, due to the public health emergency, both China and Iran adopted extensive stringent and thorough containment measures, and the detailed discussions on the 25-year cooperation agreement have been influenced. However, the trade cooperation and friendly exchanges between China and Iran will continue to deepen, and the future's cooperation prospects are promising.

Dealing with global risks and challenges posed by this pandemic requires global cooperation. After all, the wellbeing of all humanity does not come from not being inferior to other countries, nor is it at the expense of others, but from the actual and universal prosperity.

Dr. Yuan ZHANG is Professor and Director of the Religion in the Middle East Research Program of the Middle East Studies Institute (MESI) of Shanghai International Studies University (SISU).

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