14 April 2019
Honorable Former Minister Chen Deming,
Mr. Wang Huiyao,
Mr. Cui Mingmo,
Ladies and gentlemen,
It is my great pleasure to join you at the Fifth Annual China and Globalization Forum. Our Sessions today will focus on Globalization 4.0. This new Era has only just begun, but some would argue that we are already underprepared for it.
My main message here today is that Globalization 4.0 undoubtably brings opportunities, but it also comes with risks. Risks that, if not well managed, will further amplify inequalities and leave large groups of people behind.
Globalization – driven by technology and the movement of people, goods and ideas – is not a new phenomenon. The end of the Cold War marked the beginning of free global trade, technology advancement and borderless communication. Since then, globalization has created immense benefits. It has led to a more efficient division of world labor, created jobs that brought millions of people out of poverty, and allowed the world economy to grow at a rate that would not have been possible without it.
But, over time we have also learned that globalization is a double-edged sword. Open markets increase competition, which in turn produces winners and losers. As industries have relocated from one country to another, many people have been left behind and inequalities have increased. The impact that this has on societies, should not be underestimated. Not too long ago, when the UN Secretary-General addressed the state of economic and social development around the globe, he spoke worriedly about the crisis our world is facing – a crisis of legitimacy, confidence, and trust. This crisis is not only about lack of trust in Governments, it reflects a dissatisfaction and a loss of trust in globalization and the economic system that underpins it.
So, what can we expect from Globalization 4.0? The unprecedented pace at which technology in the “fourth industrial revolution” is changing, means that our systems for education, health, production, distribution, etc. will be fundamentally transformed.
Going back to where I started, this presents opportunities, but also the risk of reinforcing the growing inequalities that I just spoke of. This is because the business models in the new type of innovation-driven economy often derive rents from owning capital or intellectual property.
So, how do we move forward from here? The response to these challenges is not nationalism or protectionism. Globalization 4.0 is an unstoppable force. Global challenges require global solutions. But, business as usual will not be enough, managing the risks of Globalization 4.0 will require a complete overhaul of our approach to the economy and a rethinking of our education, health and social protection systems, to ensure that people are not left behind. Change must take place both at the national and international level.
Fortunately, things are moving, and countries are uniting together to respond to these challenges. A milestone was reached in 2015, when world leaders unanimously adopted the 2030 Agenda for Sustainable Development. This Agenda contains 17 Sustainable Development Goals that collectively aims to end poverty, protect the planet, and ensure prosperity for all. At the heart of the Agenda is the concept of “leaving on one behind” – to ensure that the benefits of globalization and economic growth does not only reach those already privileged, but also the most vulnerable groups of our societies.
My own organization, the United Nations, has since its creation been the cornerstone of the multilateral governance system. But, the multilateral governance structures that emerged after World War II are not fit for purpose to respond Globalization 4.0. The United Nations know that it must change. This is why the UN Secretary-General has launched the most ambitious reform in the organization’s history. It aims to give a stronger voice to those that until now have been underrepresented, and to make the organization better placed to realize the 2030 Agenda and respond to the challenges of Globalization 4.0.
Another positive development is China’s emergence as a strong proponent of multilateralism and international cooperation. The Belt and Road Initiative, with its ambitious aims to connect countries and peoples, enhance infrastructure connectivity, and boost trade and investment links, is a new platform for globalization. As such it has the potential to accelerate the benefits of Globalization 4.0 and contribute positively to the 2030 Agenda for sustainability. But, it carries the same risks as any other form of globalization. It must therefore be managed in a way that ensures that it does not only produce economic growth, but also inclusive growth, that reduces inequalities and generates sustainable social and environmental development.
Finally, the Forum today is an opportunity for us to better prepare for a future that is already upon us. I look forward to our discussions.