The United States and China have to “step forward” and provide global leadership to secure the future of the global economy, experts say.
The coronavirus pandemic has caused “extreme damage ” to the world economy, said Raghuram Rajan, a professor of finance at the University of Chicago. During a recent conference, the academic warned that there is a “big risk” that emerging markets sinking.
“We’re not paying enough attention to it. There’s not enough relief … How do they come out, well, with limited fiscal resources? Many of those countries their debt to GDP is going to skyrocket, even just from all the damage that has been done from the loss in revenues, from the loss in GDP.” said Rajan, quoted by CNBC.
Tharman Shanmugaratnam, president of the central bank of Singapore, highlighted that most of the current global growth, that is, about two thirds, comes from the emerging world.
“When we think about the future of the world economy, it’s fundamentally about whether the emerging world is going to continue to emerge, or whether it’s going to submerge,” said Tharman, who also chairs a global council of economic and financial leaders.
According to Rajan, the world needs a global leadership to provide the necessary resources for the countries that need them most.
“It has to come from the two biggest countries in the world — China and the United States. Both have to step up to the plate, both have not … 40 poorest countries in the world clearly … need more resources to fight the virus,” he said. .
Jiang Yuechun, director of the Center for World Economy and Development of the Chinese Institute for the Study of International Problems, agrees that cooperation between the US and China is something beneficial for all.
“China and the United States play an important role in the global economy. If the two sides cooperate fruitfully, that would positively contribute to economic prosperity and stability in the world. Conversely, if the two sides compete, it will certainly have a negative impact on world development,” the expert told Revyuh Media.
The expert considered, however, that recently the relations between the two largest economies in the world have entered a downward spiral, partially, due to the US position.
“In the current situation, be it in the economy, politics, the fight against the epidemic, the United States is adopting an extremely negative approach towards China. I think that the United States’ position only exacerbates the already difficult global situation,” said Jiang Yuechun.
The expert highlighted that China is trying to play a constructive role in solving the global crisis caused by the pandemic. However, the failure of the United States to prevent the spread of COVID-19 in its territory represents a threat not only local but of global proportions.
“The number of infected people in the United States is growing and this threatens not only the return to normal life in the United States but also the recovery of the American economy. In addition to that, the United States adds negativity to international cooperation. Washington refused to support the World Health Organization at the most crucial moment when everyone is fighting the epidemic,” added Jiang Yuechun.
The expert stressed that the United States is a great leader in the international community and “must take effective measures at a time when the world is facing a crisis.”
For his part, Rajan hopes that the upcoming US elections, to be held in November, will be a “turning point” for the US and China to dialogue again.