Experts call for new Bretton Woods system

0 Comment(s)Print E-mail Xinhua, May 31, 2024
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The international conference "80 Years after Bretton Woods: Building an International Monetary and Financial System for All" and the 2024 Tsinghua PBCSF Global Finance Forum are held in Hangzhou, east China's Zhejiang Province, May 27, 2024. [Photo/Xinhua]

Economists and central bank governors from across the world have called for a new Bretton Woods system as the world's economy grapples with challenges such as high inflation, rising protectionism, and climate change.

They made the comments during an international forum held on Monday and Tuesday in Hangzhou, capital of east China's Zhejiang Province.

"The world needs a new Bretton Woods system, and the new system should benefit all countries, provide financial stability for the future of humanity, support economic growth, and achieve global prosperity," said Zhu Min, founder of the Global Economic Governance 50 Forum. He is also a former deputy governor of the People's Bank of China and former deputy managing director of the International Monetary Fund.

Marc Uzan, Executive Director of the Reinventing Bretton Woods Committee, believes globalization has been a significant driving force for economic development over the past few decades, but fragmentation is now occurring.

"We need to reassemble a fragmented global economy to make the future more just, equitable, and inclusive," he said.

He stressed efforts to adapt the global economy to future technological advances and the emergence of digital currencies, calling for efficient infrastructure and platforms for digital transactions to ensure interoperability among different systems.

Massimiliano Castelli, Managing Director and Head of Strategy of UBS, said that from both theoretical and practical standpoints, the world needs a financial system that is not overly reliant on the U.S. dollar.

Dilma Rousseff, the President of the New Development Bank and former President of Brazil, said that the dominance of the U.S. dollar can also bring risks. "The United States can address its fiscal deficit by printing money, but it can have negative consequences for other countries."

"The global economy is likely to become more multipolar, with the possibility of the U.S. dollar continuing to dominate, but other alternative reserve currencies may also emerge," Rousseff added.

Rousseff specifically highlighted China's role in driving global economic growth, noting that China is the world's largest growth engine.

"China's contribution to global economic growth reached 32 percent in 2023. IMF data shows that China has a positive spillover effect on the global economy. One percentage point increase in Chinese growth has a 0.3 percent point effect on growth in other economies," she said.

Ali Babacan, former Deputy Prime Minister of Türkiye, believes that reforming the Bretton Woods system needs to take into account geopolitical realities, social development, and technological advancements in various countries.

"Cooperation and coordination are vital, as no single country can stand alone," Babacan said.

China has been committed to establishing more partnerships in global governance, said Zhang Xiaoyan, Associate Dean of the PBC School of Finance of Tsinghua University, adding that the Belt and Road Initiative has driven investment of nearly one trillion dollars, 420,000 job opportunities and helped 40 million people out of poverty.

Zhang said China is the largest shareholder of the Asian Infrastructure Investment Bank and has also established a Global Development and South-South Cooperation Fund, with a total fund size of 4 billion U.S. dollars.

"China has a fantastic record of good policies and fantastic growth over the last five decades," said Boris Vujčić, Governor of the Central Bank of Croatia. "Over the past 50 years, China and Europe have established very strong economic ties and relationships."

"I believe that in the future, no matter what happens, the connections and trade between the European Union (EU) and China will remain very important, and the EU and China will continue to be major trading partners," he added.

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