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Cambridge, MA. – Designed to encourage candid conversation and meaningful collaboration on key topics related to United States-China relations, the fourth Globalization Forum convened leading academics, advisors, and policymakers for a closed conference held June 18-20, 2012, at Harvard Kennedy School. Through both public addresses and panel discussions, participants explored a range of pertinent issues including international security and soft power, economic globalization, management of environmental resources, and the future of global governance.
Lawrence Summers, President Emeritus of Harvard University and former Director of the National Economic Council for the Obama Administration, delivered the Forum’s keynote address on the economic relationship between the United States and China.
“As we think about the relationship between the US and China, we need to be open to the possibility of significantly more discontinuity between the economic performance of the last decade and the performance of the next than is common in most geopolitical discussions,” said Summers. “These perspectives on the economic challenges discussed at the Globalization Forum set a backdrop for what is a profoundly important conversation which I hope will continue in economic fora for many years into the future.”
David Ellwood, Dean of Harvard Kennedy School (HKS); Sun Fang, Chairman of the Foundation for Globalization Cooperation; Li Xiaolin, President of The Chinese People’s Association for Friendship with Foreign Countries and head of the Chinese delegation; and Joseph Nye, Harvard University Distinguished Service Professor at HKS made remarks at the event’s opening dinner.
"I sincerely hope with honest communication and meaningful collaboration, we can continue to build a resource sharing and harmonious world," said Sun Fang, founder of the Globalization Forum and chairman of the Foundation for Globalization Cooperation.
“In the era of globalization, only when we try to understand and respect different countries and cultures through communications and exchanges, learn from each other, and seek common ground while reserving differences, can we truly promote the prosperity and progress of human civilization,” said Li Xiaolin. “I sincerely hope that countries around the world can realize the prosperity and progress of mankind through mutual respect and win-win cooperation.”
The world is undergoing an international shift in power from West to East. As the world’s second largest economy (in GDP PPP) and the third largest trader, China is projected by some experts to overtake the US as the largest economy in as little as ten years. China’s steady rise to economic power has granted the country new avenues for leverage on the world’s stage: the country’s constructive engagement is now considered by many to be crucial for solving any world issue, and its economy has a huge impact on the internal economies of countries around the world. Yet, world governance organizations and policies do not necessarily reflect this new political structure. Much of the Forum’s discussion centered on potential global rebalancing measures essential to better reflect this new normal.
The US and China: The World’s Biggest Consumers and Polluters
China is making strides towards more environmentally sustainable energy options and recently announced plans to allocate upwards of $31.8 million in incentives to promote electric vehicles. At the same time, China remains the leading consumer and producer of coal, and is part of a region that consumes well over one-third of the world’s primary energy and three-quarters of Middle East oil exports. Such high demand for natural resources has begun to heighten fears of potential conflict between the US and China. Not only are the two countries the largest energy consumers in the world, China and the US are also the two largest polluters, accounting for nearly half of global carbon emissions each year. During the event, panelists and participants discussed how more coordinated energy governance policies could benefit both the US and China and evaluated the effectiveness of existing partnerships as well as the impact of energy innovation globalization on compromise and collaboration going forward.
Chinese Private Enterprise and Globalization
According to an October 2011 report by the US-China Economic & Security Review Commission, Chinese State-Owned Enterprises (SOEs) and Share-Holding Enterprises (SHEs) account for nearly half of the country’s economic output and make up the majority (80 percent) of the Chinese stock market’s value. China also continues to expand its global presence. While a relatively new phenomenon, Chinese investments globally continue to grow: at $21.4 billion, overseas investments have more than doubled over the year-earlier quarter according to private-equity firm A Capital. In fact the country is now the second largest investor in terms of gross spending in research and development. Yet recent reports of the country’s slowing economic growth bring into question China’s ability to sustain its important role in the world economy. Forum participants spoke openly about necessary steps both the US and China can take to improve regulation and product oversight as well as the effect of China’s unique form of capitalism on business firms in the developed and developing world.
The Globalization Forum was organized by the Rajawali Foundation Institute for Asia at the Ash Center for Democratic Governance and Innovation and the Belfer Center for Science and International Affairs, both at Harvard Kennedy School; the Chinese People’s Association for Friendship with Foreign Countries; and the Foundation for Globalization Cooperation.