Illustration: Luo Xuan/GT
Developing economies and China may need the One Belt and One Road initiative more than ever, given various events last year, such as Brexit
. Although it might be premature to say that the trend of internationalization and globalization after World War II is coming to an end, the world does seem different.
Driven by the radical changes in the Soviet Union and Eastern Europe in the 1990s, the West began to promote democratization and color revolution all over the world, which led to continued chaos, civil wars and terrorism in some Middle-Eastern Arab states, resulting in millions of refugees flooding into European countries.
Waves of refugees and terrorist events have crushed the European dream of internationalization, thus prompting the rise of nationalism and populism among European nations and leading to the UK's withdrawal from the EU and other EU members' potential departure from the bloc.
Since the 1970s, economic globalization and neoliberalism have become the mainstream ideology in the West, which impacted the US in two aspects: economic globalization caused the free flow of capital across the globe and the hollowing out of the US industrial base; and continued regulatory loosening in the US financial sector led to its 2007-2008 financial crisis that later triggered a global crisis and worldwide economic recession.
As more of the US middle class found themselves living in reduced circumstances, sentiment of distrust and agitation grew, which led to the success of Donald Trump
, who claimed to give a voice to underrepresented US people. Europe and the US are now expected to focus more on internal affairs and are likely to reduce their aid to developing nations.
After World War II, a number of international aid organizations were established in an effort to help advance developing economies and lift them out of poverty, such as the United Nations Development Program, the World Bank, Asian Development Bank, Inter-American Development Bank and African Development Bank. In addition, major developed countries have also rolled out their international agencies for poverty alleviation. Nevertheless, the reality is that nearly one billion people today are struggling below the poverty line without adequate medical care or food.
Regarding inefficient international development aid from the West, some Western experts in development aid such as William Easterly and Niall Ferguson expressed disappointment in the failure of aid to the developing world from Western economies. In comparison, China has maintained high-speed growth momentum since its opening-up in the 1970s. It surpassed Japan as the world's second-largest economy and successfully lifted 800 million Chinese out of poverty. Rather than relying on international aid, China's economic miracle is attributed to its opening-up.
Amartya Sen, a Nobel Prize laureate in economics, said during his visit to Peking University in 2016 that the experiences and lessons China has gained during the last three decades of development deserve worldwide attention, and believed "China has effectively combined its resources in education, healthcare and other public services to serve society," according to the University's official website.
China's implementation of nine-year compulsory education since the 1960s has played a key role in boosting its economy. By looking at China's general development experience from the perspective of institutional arrangements, the country has successfully shifted from a planned economy to a market economy and gradually established certain institutional arrangements for industrialization that are required by the market economy. A strong central government has guaranteed a secure and stable environment both externally and internally where all forms of ownership are allowed for the development of enterprises and entrepreneurs. In addition, flows of labor, mass education, a certain degree of intellectual property rights protection and a relatively stable financial system have all played significant roles in establishing those institutional arrangements. It can be seen that China's path to prosperity has shown a practical and feasible development path for many developing countries.
As more and more developed Western economies consider trade protectionism and focus on their domestic affairs, South-South cooperation between China and many other developing nations and the Belt and Road initiative provide an alternative for joint advancement among developing economies.
Industrial and agricultural development is still seen as the only way out of poverty for developing economies. But they have an urgent need for infrastructure including education, medical care, transport and communications, electricity and energy.
China, which is one step ahead of other developing countries, also needs to cooperate with them to expand economic ties. In this respect, China and other countries have founded the Asian Infrastructure Investment Bank and implemented the Belt and Road initiative, with the aim of increasing foreign investment in other developing countries while enhancing interconnectivity among them. Amid reduced attention and aid from Western nations, the Belt and Road initiative is expected to inject significant impetus for the economic and social advancement of developing countries. The author is a professor with the School of Economics of Peking University. firstname.lastname@example.org