John Denton, Secretary General Of The International Chamber Of Commerce: "The Belt And Road Initiative Is Essential To Establish A Dispute Settlement Mechanism

For some time, some western countries have made some "murmurs" about the motivation of the "belt and road" construction, and put forward "debt trap theory" and "geopolitical tool theory". But John W.H. Denton, Secretary General of the International Chamber of Commerce (ICC), from Australia, has a completely different view.

"I'm not going to call this initiative in such terms. Fundamentally speaking, it is an economic innovation initiative put forward by China to adapt to the changes in China's foreign trade development. " "It was not a political, diplomatic tool from the beginning," Denton said

But Denton also pointed out that if the initiative has problems in the implementation process, it may lead to misunderstanding. "If you can't ensure the continued effectiveness of your investment, you may be misunderstood and given the names you just said."

Danton said that ICC is willing to support the effective implementation and sustainable development of the belt and road initiative. To this end, the ICC arbitration court has set up a special "belt and road" committee, hoping to help the belt and road initiative solve commercial disputes. "The dispute settlement mechanism is essential, without which the effectiveness of trade and investment cannot be guaranteed."

Founded in 1919, ICC has more than 45 million business members. On the occasion of ICC's Centenary Celebration, the ICC Banking Committee held its 2019 annual meeting in Beijing from April 11 to 12. 700 delegates from 59 countries and regions attended, setting a new record for the annual meeting. On April 11, on the sidelines of the annual meeting, Danton received a small group interview from Chinese media such as the 21st century economic report.

Global economy or outbreak of systemic crisis

21st century: Recently, for the third time in a row, the International Monetary Fund (IMF) lowered its expectations for global economic growth. What do you think of the changes that are taking place in Global trade?

I think it is very appropriate to adjust the growth rate of China by 1.0% in 2019. Overall, the outlook for the global economy is not strong, some weak. The headwinds we are experiencing, including the uncertainty of trade disputes, have begun to have an impact on global growth. In addition, confidence in the multilateral trading system is declining in some countries.

In addition to the uncertainties caused by trade disputes and geopolitics, some structural changes are also taking place in the trade pattern, as pointed out in the recent WTO report. For example, with the application of 3D printing technology, some transportation may no longer need physical transfer, but can be online transmission. For example, the development of renewable energy will also have an important impact on commodity trade.

21st century: at the end of last year, the United States rejected the reform idea of WTO Appellate Body proposed by China and Europe. There is no sign of resolving the deadlock of the WTO Appellate Body. Are you worried about that?

Denton: very worried. First of all, not only the WTO, but also the global economy is facing the possibility of systemic crisis. Recently, the reports issued by WTO and IMF have expressed the same view, that is, unless there is a plan to continue to safeguard the multilateral trading system, the global economy may run into a dangerous reef.

How to solve these systemic crises? I believe that the core of the global economic governance framework is the G20, on which a political consensus should be reached to promote economic reform. In fact, the G20 came into being under the global economic systemic crisis. The most important thing now is that G20 members must reach a consensus on maintaining and updating the multilateral trading system with WTO as the core.

On this basis, G20 members should think about how to reform WTO in order to increase the relevance, flexibility and accountability of WTO, especially to formulate new rules to adapt to the development of digital economy. Since the establishment of WTO in 1995, great changes have taken place in the global economy. At that time, the undeveloped international economy should have become the core of our global economy. This year's G20 Osaka summit is crucial to promoting the reform of the multilateral trading system at the political level. We also expect China to continue to play a constructive role.

21st century: how to see the potential impact of Sino US trade disputes on the global economy? Do you think the two countries can reach an agreement in the near future?

Denton: one of the reasons for the outbreak of the Sino US trade war is the huge trade imbalance between the two countries. Now, the U.S. trade deficit with China has declined significantly, and both governments do not want trade issues to become the core issue during their administration, so it will be eased in the near future. This will give relief to the global economy.

But I don't think the fundamental problems between the two countries can be completely solved in one meeting. The issue of industrial subsidies and trade distortions may take longer and should be addressed in a multilateral framework, because it involves not only China, but also other big countries such as India and Brazil. In addition, the issue of special and differential treatment for developing economies is also a difficult topic to discuss.

China will choose "benign slow growth"

21st century: how do you evaluate the new foreign investment law just passed?

Denton: I think it's very interesting that when some people criticize China for not doing enough after China's accession to the WTO and the need to further promote internal reform, China has clearly realized that in order to make the economy stronger, it is necessary to innovate policies and formulate new laws and regulations. The introduction of the new foreign investment law has proved China's willingness to continue to promote economic reform, which will further accelerate the reform process of WTO. I think the signal from China is very positive.

For the current domestic economy, China has many choices: one is to introduce stimulus policies and impose administrative intervention for short-term economic benefits; the other is to accept slower growth and vigorously promote economic reform for the sake of long-term sustainable growth. I think it is most likely that China will continue its efforts to promote institutional innovation in order to promote economic reform, rather than relying on stimulus policies.

21st century: how to evaluate the belt and road initiative proposed by the Chinese government?

Denton: This is one of the most important policy initiatives that China has put forward in the past 20 years. We are willing to support the effective implementation and sustainable development of this initiative, so that it can not only benefit China, but also bring dividends to all countries along the line. To this end, the court of arbitration of the International Chamber of Commerce and the China Council for the promotion of international trade signed a cooperation intention, which is a very positive step.

The ICC arbitration court has specially set up the "belt and road" committee to support the acceptance of "one belt and one road" disputes. The ICC is the world's leading arbitration institution, independent of any government neutral institution, and can contribute to rule making, law enforcement and dispute resolution procedures. In this regard, we hope that our internationally renowned arbitration institutions will play an important role. This is crucial because without an internationally renowned non official arbitration institution, international trade and investment cannot be effectively implemented.

21st century: some people say that the belt and road initiative is a debt trap. Do you agree?

Denton: I'm not going to call this initiative that way. In terms of China's foreign trade, one of its initiatives is to adapt to China's economic development. From the beginning, it was not a political and diplomatic tool, but an economic development tool proposed to conform to the development of China and the countries along the belt and road. There is indeed a lot of heated discussion about the political motives of this initiative, but I think if we look at the departments that initiated the initiative - not the Ministry of foreign affairs and the Ministry of defense, but the important economic sector - we can see that it is a very reasonable economic initiative.

However, in the process of implementation, if the continued effectiveness of the investment is not ensured, it may cause misunderstanding and be crowned with the names you just said. Therefore, it is important to ensure that the effect of China's investment in other countries is positive. We should create social welfare for the local people, ensure the sustainability of investment, transfer knowledge and technology to the local areas, create jobs and pay wages in time, and abide by local competition laws and regulations These are critical to the sustainability of the project.