Commentary: New strategies needed to boost global economic development

As the world economy is facing varied challenges including slowing growth, differentiated policies, transition and increasing uncertainties, new strategies are needed to cope with the changing economic situation and boost global economic development.

During the World Bank Group-International Monetary Fund (IMF) annual meetings in Lima, Peru earlier this week, IMF Managing Director Christine Lagarde said the world economy is not in a crisis any more, but in a period of change.

She warned policymakers around the world that "no country can go it alone and international cooperation is more needed than ever."

In the eyes of experts attending the meetings -- an important event to estimate the world economic situation, challenges in the period of change may not less than those in the crisis.

Just before the annual meetings, the IMF downgraded its forecast for global economic growth this year to 3.1 percent from the 3.3 percent it forecast in July and the 3.5 percent it projected in April.

In face of the severe economic situation, Lagarde said, the IMF will pay more attention to economic transition, spillovers of major economies' policies and global cooperation.

Some economists believe that over the past seven years after the outbreak of the global financial crisis in 2008, money printing served as a main solution to boost the world economy from crisis to recovery.

Meanwhile, emerging economies and developing countries, led by China, have played the role as a major engine for global growth.

However, with the growing transition of the world economy, the old solution to boost global economic development needs to be changed.

During the period of transition, changes in China and the United States, the world's two largest economies, will have a global impact.

As a main contributor to the world economic growth in recent years, China's economic transition has attracted worldwide attention.

Due to China's important role for the world economy, its economic transition has been put on the top agenda of the World Bank Group-IMF annual meetings.

Chinese Finance Minister Lou Jiwei said during the meetings that the slow growth of emerging economies is relative and China's 7 percent is still a very high growth rate at the international level.

"Ultrahigh speed of growth is not sustainable. Neither is the over-reliance on government investment and real estate," Lou said, "China needs structural transformation and a change in the development mode, and a properly slower growth is a sound process."

China's transition and reform have been widely recognized at the meetings.

Commenting on China's GDP growth, Lagarde said the country's slowdown was "predictable and expected."

"There will be bumps on the road as no transition can be done smoothly with no disruption or volatility ... We welcome China's transition process coupled with more market-determined exchange rate fluctuations," she said.

Lagarde's words were backed up by the IMF's Global Policy Agenda, which was released ahead of the meetings.

"In China, fiscal, social security and state-owned enterprise reforms are needed to transition to more domestically-driven growth, which will benefit the global economy over time," it said.

In addition, the China-proposed Belt and Road initiative, or the Silk Road Economic Belt and the 21st Century Maritime Silk Road initiative, and the Asian Infrastructure Investment Bank (AIIB) establishment have both attracted more attention as new solutions for boosting global economic growth.

Meanwhile, the United States, whose economic recovery has largely benefited from the position of the U.S. dollar, a universal money, should bear more global responsibilities and play a bigger role in boosting the world economic growth.

For example, it should work with other developed countries to further broaden public investment to fuel economic growth, so as to provide outside support for developing countries' structural readjustment.

Moreover, export-dependent countries seeing their revenues falling should accelerate reform and explore new areas for growth.

All in all, both China and the United States, as well as other major economies, should strengthen coordination in their macro-policies and stay away from self-serving trade manipulation for a healthier recovery of the world economy. Endi