President Xi Sets Sights on Ultimate Goal of Ending Poverty In the World

Addressing the B20, the gathering of businessmen from the G20 countries one day before the opening of the G20 Leaders Summit in Hangzhou, China, President Xi Jinping presented a comprehensive program for pulling the world out of the present economic crisis. Xi stressed that bringing a country of over 1 billion people into a reasonable standard of living was “an endeavor never undertaken in the history of mankind. And economic development was key.” He continued, “We have taken bold initiatives and have lifted over 700 million people out of poverty. And this is the course that China and the world should take. For this purpose, we have introduced large-scale investment overseas.” He then said that many were skeptical that China could continue moving in that direction and not fall into the ostensible “middle-income trap.”

China’s response to the “new normal” with the collapse of the world export markets was to push for innovation, invigoration, interconnectedness and inclusiveness as “the new drivers of economic growth,” Xi explained.  “We have a new means of integrating China in the world and in maintaining medium-high rates of growth. In this  way, we can deliver more to the world and maintain China’s growth at the same time.”

“China’s growth had hitherto depended on resources, capital and the labor force, but that old model is no longer sustainable. Now we need an innovation-directed strategy. Scientific and technological development holds the key to economic development…. We’ll take the lead in science and technology and conduct fundamental research to resolve the scientific and technological problems holding back economic and industrial development. We will speed up commercialization of R&D and foster strategic emerging industries and move industries up to a medium-high level of the value chain.”

The President then outlined the real motivating forces behind these changes. “People are the foundation of the country. We have to be oriented to the needs of the people and raise their living standards and the quality of their lives. We will lift over 57 million people out of poverty and poverty will be alleviated in all poor counties by 2020. This is a solemn promise to the Chinese people. We have lifted over 70% of the population out of poverty. We will make the pie bigger and continue the global fight against poverty,” he said.

Xi went on to say that the policy of opening up to the outside world will continue. “We will continue to make the RMB an international currency and will continue opening up our capital accounts. There will be a further internationalization of China’s financial sector,” he said. “China’s development … will provide more goods to the international community. The Silk Road Economic Belt is progressing rapidly and the Maritime Silk Road is well under way,” he said. “But this is not China creating a sphere of influence but rather a means of supporting the development of all countries. We are not building China’s ‘backyard garden’, but we’re building a garden to be shared by all countries….

“The world economy is now in a period of profound adjustment. We’re standing at a crucial juncture. Renewed growth drivers are replacing the old ones. The dynamic of the old scientific revolution is waning while the new impetus for growth is still in the making,” Xi said. “We need an innovative world economy … in order to unleash the potential.  A new scientific revolution with the internet at its core is gaining momentum. Artificial intelligence and virtual reality is developing by leaps and bounds. A combination of the virtual economy with the real economy will bring changes to our way of work and our way of life. But this will not happen overnight nor will it be problem-free….

“China made breaking new paths of growth the goal of this year’s summit,” Xi reminded the B20 leaders. “We must seize the historical opportunity to begin the process of innovation, of new scientific and technological revolutions, and industrial transformation in order to create new growth. This is the first time that the G20 has taken action on the issue of innovation.”

Xi then issued a series of four points which are now on the table. “We must combine fiscal policies with structural reform policies and build an open world economy in order to increase the scope of the economy.” There should be no “beggar thy neighbor policy,” he said. And with regard to interconnectivity one of the four  “I’s” that are the theme of this year’s summit, he said that “countries all fall or rise together. We have to promote the common development of the world economy,” he said. “China proposed a Global Infrastructure Connectivity Alliance initiative, and is encouraging all the multinational development banks to adopt a joint declaration of aspiration and give greater funds and intellectual support to infrastructure projects in order to speed up the process of global infrastructure connectivity,” Xi said. “We have to create a chain of win-win global growth.”

And fourthly, the issue of global Inclusiveness.  “We must abolish poverty and hunger,” Xi said. “This is not just a moral imperative, but it will also unleash effective demand.” Xi pointed to the increase of the inequality quotient which had gone from .6 to .7. “We must pay close to this,” Xi said. “The G20 should work not just for the benefit of its own countries, but for all the world.” [One of a number of statements that was met with great applause.]

Xi then concluded with some well-timed remarks on the political environment. “We must work to build a peaceful and stable environment. We have to reject out-dated Cold War mentality and build a new concept of common, cooperative, comprehensive and sustainable security. We should uphold the principles of the UN Charter and adhere to multilateralism and dialogue…. We must seek common ground in resolving our problems. The world is a better place when everyone is better off. We must steadily improve our macro-economic cooperation and enable people from different backgrounds to work together toward our common destiny. We must work together to improve global governance and adapt to changes in the world economy on the basis of equality. We should adopt a mechanism of sharing and not a `winner take all’ mentality. At this crucial juncture of development, we must transform the G20 from a crisis-response mechanism to a mechanism of long-term governance and enhance the G20 as the premier forum for international governance.”