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China poised as key stabilizer in world economy: Boao Forum

A view of the skyline of Beijing, China, on December 16, 2017.
Greg Baker | AFP | Getty Images
A view of the skyline of Beijing, China, on December 16, 2017.

BOAO, China — China is poised to be a key stabilizer in the world economy as its rise and ambitions underscores a transition in world power relations, said an international affairs expert on Thursday.

"Since 2008 (the global financial crisis), the question for the world economy has been who will serve as key stabilizer for the world economy," said Kent Calder, director of the Reischauer Center for East Asian Studies at Johns Hopkins School of Advanced International Studies in Washington D.C.

"The U.S. is in nominal terms is still the largest economy in the world, it has some deep underlying strengths … at the same time there's no question that the economic power and geopolitical influence of China has risen sharply in the last decade."

Calder was speaking at a media interview at the annual Boao Forum in the Chinese province of Hainan where leaders and thinkers have converged for four days to discuss issues in global trade and diplomacy in the new world order with Donald Trump's presidency.

As the world's top two economies, the U.S. and China will need to find a way of cooperating to ensure that the global system stabilised in this century, he said.

The advent of the AIIB (Asian Infrastructure Investment Bank) and China's ambitious Belt and Road initiatives are paving the way for the East Asian giant's stride into the top world leadership, he said.

"We are in an important transition in world history as well as transition in global political history," Calder said.

While U.S. has traditionally taken the role of the stabilizer in the world trade system, recent events have raised concerns about the fallout from an increasingly protectionist U.S.

Last week, G-20 finance ministers and central bankers made a token reference to trade in their communique for the first time in a decade after a two-day meeting failed to yield a compromise with the U.S.

This comes on the back of Trump's presidency secured through his key constituents in the Rust Belt who have seen their manufacturing jobs disappear as globalization takes hold.

While China and some segments of the U.S. are key beneficiaries of the trend, it has also widened inequality that countries need to grapple and deal with, he added.

"Globalization produces winners and losers; there is no question about that," he added.