Human society must shape a win-win future in response to the epidemic

(Jim O’Neill, Chairman of the Royal Institute of International Studies)

(Xiaoming Liu, Chinese Ambassador to the UK)

(Lianbing Xiao,Secretary of International Exchange and Communications Center)

Lianbing Xiao：How has the Covid-19 pandemic impacted the human society?

Jim O'Neill：In some ways, it is still too early to confidently answer these questions about the epidemic’s scope, extent and impact. We don’t know at this time of writing, whether there will be more effective treatments, an early vaccine, or whether there will be a so-called second wave and so on. What does appear to be the strong view of infectious disease experts, is that these sorts of infections don’t simply disappear by themselves, so without a really useful vaccine or treatment, we may have further consequences. Let’s hope all these promising signals from universities and pharmaceutical firms turns out to be confirmed, and then we can make more concrete conclusions, as well as move on from this pandemic.

In terms of the scale, there are two obvious things to say. Firstly, it is the first such truly global pandemic in most people’s livetime throughout most of the world, and in this sense, it is truly historic. I guess some places such as Antarctica may have escaped but virtually nowhere else. Secondly, because of the measures undertaken to try and limit the number of humans infected, and sadly, that otherwise could die, government’s all over the world have shut down their economies that caused enormous economic loss. This started with China in February, where typical monthly economic data reported a huge 20pct loss, for example in industrial production, similar declines in similar and other indices, were reported in many other parts of the world, starting with European countries in March, April and this spread to the Americas and beyond as the infection spread there. Even with evidence of notable economic recovery since April in China, June in Europe and the US, many independent experts estimate the global shock to world GDP may have been as much as 10pct in the second quarter of 2020, and the IMF is still forecasting a decline for the whole year of close to 5pct. This is pretty dramatic, and if it weren't for dramatic monetary and fiscal policies, the economic hit would have been even bigger.

In terms of the extent and impact on society, the consequences are still unfolding and largely unclear, but there are plenty of things that we can make speculative judgement. On the negative side, there has been huge loss of revenues for many businesses, some of which have had to close in many parts of the world, and as a result we are in the midst of significant employment losses. Many analysts are very negative about forthcoming unemployment in many parts of the world, and as a result, there are grave fears that we have entered a fresh era of rising inequality in many societies. It is not necessarily the case that this will be as bleak, because if we can find an early effective vaccine, there may be big boosts to economic activity, and more jobs suddenly available.

Ambassador Liu: The history of human society is a history in which men have constantly triumphed over pandemics. The unprecedented coronavirus pandemic has ravaged the world and brought an all-round impact on human society. Its impact is still growing. I think it is at least reflected in the following aspects:

First, Covid-19 posed major challenges to human health. This pandemic is the largest of its kind human beings have dealt with in a hundred years. As of early September, it had infected more than 26 million people worldwide and took more than 800,000 lives. The pandemic shows that major infectious diseases are a severe challenge to human health and life security, and that the global public health system and capacity building must be strengthened.

Second, Covid-19 dealt a severe blow to the world economy. The pandemic resulted in a significant shrink of international trade and investment. The global industrial and supply chains are quickly adjusting, and the global economy is plunged into a deep recession. According to the predictions of the IMF, world economy will shrink by 4.9% this year and China will be the only major economy that registers a positive growth. Countries are gradually re-opening but global recovery remains tough.

Third, Covid-19 brought severe tests to global governance. Multilateralism, solidarity and cooperation should be upheld to either fight the pandemic or recover the economy. Unfortunately, there is a country that has put itself first, embraced unilateralism and protectionism, used the pandemic to accelerate its “economic decoupling” and stigmatize other countries and even touted a “new cold war”. The global governance system built since WWII and the multilateral system are now under serious test.

Fourth, Covid-19 brought deep reflections on human development. This is not the first time that human beings have dealt with a global pandemic, not will this be the last time. The international community feels more deeply that mankind lives in a community of shared future. The more difficulties and challenges we face, the more we must build consensus and overcome difficulties together. The more suspicion and misgivings, the more we must strengthen exchanges and mutual learning among civilizations and promote common development. I firmly believe that mankind will eventually overcome the pandemic and usher in a better tomorrow.

Since the outbreak, China and the UK have joined hands in fighting the pandemic and have made positive progress:

First, we’ve maintained policy coordination. The leaders of the two countries communicated closely. President Xi and Prime Minister Johnson had two telephone conversations within more than a month and reached important consensus on strengthening cooperation in the fight against the pandemic.

Second, we’ve strengthened experience sharing and R&D cooperation. Chinese and British experts have in-depth exchanges of experience on epidemic prevention and control, and universities, scientific research institutions and medical companies of the two countries have continuously strengthened cooperation in virus testing, vaccine and drug development, and clinical diagnosis and treatment.

Third, we’ve provided material support to each other. At the critical moment of our fight against the pandemic, all walks of life in China and Britain reached out in a timely manner and provided valuable support to each other.

Fourth, we’ve promoted international cooperation. Both China and the UK support the World Health Organization in playing a central role in coordinating the global fight against the pandemic, support the cooperation within the framework of G20, and call on the international community to work together to provide support to the vast number of developing countries and strengthen tripartite and multilateral cooperation.

At present, the pandemic is still ravaging the world, and China and Britain can join hands to make new contributions to the global fight against covid. China and the UK are at the forefront of the world in vaccines development, the two can strengthen cooperation in this critical area and push the vaccine to the market on an earlier date. China and the UK can also strengthen communication and cooperation through bilateral and multilateral channels, support the World Health Organization to play a central role in coordinating vaccine research and development, increase the availability and affordability of vaccines in developing countries, and actively explore trilateral health cooperation between China, Britain and Africa, and work together to advance global governance in public health.

Lianbing Xiao：The British magazine “The Lancet” objectively introduced the origin of the virus to the UK and the world with high professionalism. How do you view the role of professional media in the pandemic?

Ambassador Liu: The virus respects no borders or races, and solidarity and cooperation are the only option for mankind to overcome the pandemic. At this critical time when the very survival of mankind is at stake, the media is not only a disseminator of information, but also an advocate of global cooperation. In the face of crises, professional media play an irreplaceable and important role in publishing information, sharing experience, building consensus, and promoting cooperation.

At a time when some western politicians are shifting the blame to China, professional media represented by “The Lancet” published righteously the professional judgment and fair opinions of British medical experts, which pronounced a powerful response to claims that “China covered it up” and “China should be held accountable”. The Lancet article can help the UK and the world understand China’s contribution to the global fight against the pandemic, and help create a sound atmosphere for the international community to unite in its fight against the pandemic.

I sincerely hope that professional media can uphold a sense of responsibility and mission, and abide by the principles of objectiveness, fairness and truthfulness, send out a rational voice, mobilize the strength of all sides, and contribute to global cooperation in fighting the pandemic and contribute to safeguarding global public health.

Lianbing Xiao：Human society will enter the post-epidemic era. In your opinion, what are the characteristics of the post-epidemic era? What will change? How to view the impact of the epidemic from the perspective of turning crisis into opportunity?

Jim O'Neill：It is also the case, that there are some positive structural trends that seem to be rising as a consequence. For many years, indeed, for most of the era since the great financial crisis of 2008, measured productivity has been remarkably weak in many advanced economies which , in my view, had emerged as the biggest long term economic challenge for the future. Much of this was due to the significant evidence of persistent weakness in the so-called service sector economies, and society, business and policy leaders appeared to be having difficulty boosting productivity despite all the technological advancement that , at least, superficially, many observers think should be useful. It is not impossible that we may have stumbled across forces that are now prompting behaviour that is boosting productivity. Three areas spring to mind. One, the shift to working from home, in some cases, for the time being full time, and for others, temporarily and flexibily, now means many professional services people can still do the same job as before, with all the time previously spent on commuting into big cities, no longer needed. They can work when they need and don’t have the same pressures. Many businesses, whether they be financial services, tech companies, all seem to report just as, if not stronger revenues, despite their employees, not being in offices. Two, more and more consumers are purchasing their goods on line, which of course, adds to the pressures on many physical buildings, does mean the retail sector is boosting its productivity. In the UK, the very latest month’s data showed a surprisingly strong rise in retail sales, taking the overall level to stronger than that a year ago, yet every day, the newspapers have stories of shops closing. Thirdly, the pressure on our health systems appears to also be forcing a structural response in the health sector, which might also mean the beginnings of a huge boost in productivity in this sector. If all of this turns out to be true, it will mean a requirement for new jobs elsewhere, but it will allow for a much needed boost in productivity, which would allow for stronger trend growth and higher earnings.

There are lots of other possible consequences too, that again, tentatively we can make some judgements. I could spend hours speculating about some of these, but just two more for now. Firstly, it may well be that in many societies, individuals will now realise more about the consequences of their own actions for their fellow citizens. I would argue that due to their culture, as well as some experiences of past pandemics, many north Asian countries, China included, pursue this habit. But in the west, if it were to be true, it will be new, and perhaps quite welcome. It may turn out to be not true, only temporary, and once a vaccine or therapy found, people immediately return to their old habits. We shall see. A second issue is of course, about very large cities, especially super cities, the likes of London and New York, and perhaps many others. Due to social distancing, working from home, fears of using public transport, even by the start of September, some months after the end of the toughest form of lockdown, many cities are deserted. This is a shock to many people as it is perceived wisdom that economic growth, culture and many parts of enjoyable society come from the closeness of people. It may well be that, we have seen peak agglomeration and different forms of relationship between mass urban life, and smaller cities and towns emerge. Again, it is far too early to conclude about this, and there could be many negative, but also many positive consequences, but it is certainly possible.

One of the more challenging aspects of this pandemic is that, in some parts of the world, it is seemingly adding to a more internal obsessed view of life, and shifts away from the progressive norms of the previous 30-40 years era. This is especially notable in the US, but also my country to some degree, the UK, and some hints about it elsewhere, which of course, many overseas observers may include China. I think it is important to emphasise in this regard, this appeared to be the prevailing mood anyhow, and the appearance of the pandemic has simply added to the mood, whether justifiable or not. As with many issues, there are some legitimate issues for both sides of a story. As successful as globalisation has been, and i have been one of its loudest advocates and supporters, it is also true, that policymakers, and business didn’t do enough to enable transition or help those inside some countries that lost out from aspects of globalisation. These are the circumstances that allowed for president trump to surprisingly win the election in 2016 and also for the strange decision for UK voters to approve the referendum to leave the EU. The big surprise in that result was how many traditional left of centre , labour party voters supported the decision. These dissatisfied , often low to lower income workers, often-not always from traditional manufacturing areas- perceive globalisation as having cost them personally. I don’t share these views, but it is not entirely without some foundation as western governments should have done more in terms of education, retraining, skills and beyond, to help them transition. It is in these circumstances, that aspects of the anti-China mood can be twisted by politicians that choose to benefit from this mood. So of course, it also follows that , it is superficially attractive, when the world is suddenly hit by an awful pandemic, to blame the country, where it appears to have started, especially as it seems to have been a particularly large winner of the previous form of globalisation. In this context, and i shall return to this, Chinese policymakers need to think openly themselves about the unfortunate timing of covid-19, and allow them to explore ways of engaging differently with the rest of the world. Because otherwise, the current populist narrative that China is trying to overtake the world, export its own chosen form of governance, and it will do so, at any cost, could rise further. And this could be very dangerous, and of course, certainly lead to further challenges about the perceived era of peace and development.

One crucial way this can be improved soon would be around the forthcoming G20 meeting, this year, hosted by Saudi Arabia. One of the big, and so far, disappointing contrasts to the global policy response to the 2008 crisis, is that global governmental co-operation has been poor. Indeed, at the April IMF meetings, the G20 failed to issue even a communique, which given the urgent need for more money for global equitable vaccine distribution as well as boosting the resources of the IMF, was troubling. China must not be excessively put off by this current US administration’s use of such global entities to isolate China, because it is simply too important. Resurrectly a powerful shared role and leadership through the G20 is something we badly need.

Ambassador Liu: The world is witnessing dramatic changes unseen in a century, and the pandemic has accelerated such changes. Their overlapping effect is pushing mankind once again to the crossroad of progress versus regression, unity versus separation, and openness versus closure. But in general, in the post-covid era, human society will see both opportunities and challenges, but there will be more opportunities than challenges.

First, peace and development are still the theme of our times, but new risks and challenges exist. Peace, development and win-win cooperation remain the common aspirations of countries despite the constantly emerging global challenges. There is one country that is standing against the trend of history, deliberately inciting ideological confrontation in the world, openly coercing other countries to choose sides in an attempt to pull a new “Iron Curtain” on the world and start a new “Cold War” and push the world into turmoil and split. Insightful minds across the world must stay highly vigilant and resolutely oppose such moves.

Second, the world has entered a period of turbulent changes, and the international landscape is evolving quickly and profoundly. Emerging economies and developing countries are on the rise and are balancing the power contrast of the globe. But the world faces more uncertainties, the interaction between major powers is accelerating the realignment of international political relations, the twists and turns of globalization are pushing the evolution of the world economic order. Traditional and unconventional security risks are testing global security governance, and the new round of technological revolution and industrial transformation are reshaping the global innovation landscape, at the same time exchanges and mutual learnings between different civilizations are advancing the development and progress of human society.

Third, China has become an important force for the progress of our times and will definitely make even greater contribution to human development and progress. Facing complex international situations, China remains a builder of world peace and is constantly injecting positive momentum to the changing international landscape. China is always a defender of the international order, and is constantly adding stability factors to the global governance system. China is always a contributor to global development, and is constantly providing strong driving force for world economic growth. China is always a provider of public good, and is helping developing countries as possibly as it can. History has proven and will continue to prove that China is better because of a better world, and the world will be better off as China develops better.

Lianbing Xiao：Pandemic knows national borders; virus does not distinguish between races. In the post-epidemic era, what consensus do you think should be adopted to promote the healthy development of the international community?

Jim O'Neill：I would say 3 things. Firstly, as just discussed, we need to strengthen , improve many of the established international forms of governance, especially the world bank, IMF, UN, WHO, WTO and the G20. These organisations, all with faults, sit at the centre of global governance. To pick a favourite Chinese phrase, when improved, we do end up with a “ win-win” Outcome and this must not be lost in the current mood of some countries. 2. I have increasingly believed for many years that we need to improve the operational model of global capitalism. Not only have there been clear losers of globalisation, but there are far too many signs of market failures in society, that the current system appears to be unable or unwilling to solve. Two huge ones are climate change, and antimicrobial resistance ( AMR), each of which are as big, if not bigger challenges going forward than this pandemic. Many businesses are spectacularly good at delivering maximum profits, but they are also very good at using the existing rules and modes of behaviour to pursue these paths, even if it results in externalities that society doesn’t benefit from. It is also the case that much of business doesn’t often regard society’s challenges as its own. So long as their consumers want to buy their product, that is the end of their mission. In my view this is not enough. Companies need to discover what i call, “profit with purpose”, where they try to optimise a number of goals, including their employees and stakeholders needs, as opposed to just those of their shareholders. I think it isn't easy to make this transission, but i think it is necessary. The third specific thing, of course, is we need to rethink about our health systems and position them. One of the most interest things i have done in my professional life is lead an independent review into AMR, and one of my missions i chose was to make finance participants and finance ministers aware of the consequences of not finding solutions, not just health ministers. I had some success, because we did manage to get the topic on the g20 agenda, but i didn’t succeed enough. Oddly this pandemic has, because of the consequences for our economies and finances. This means it Is a lot easier to influence business people and finance decision makers that we need to treat health investment, especially in terms of building resilience to be just as important as building airports and roads. I hope this happens, as if not, we will have another huge global health crisis, somewhere in the not too distant future.

Ambassador Liu: The pandemic is a mirror, through which one can see a complicated international landscape. For the international community to achieve healthy development in the post-pandemic era, I believe the world has to engage the following:

First, uphold the consensus of multilateralism and oppose unilateralism and bullying. Unilateralism at present is on the rise, and one country in particular has placed its own interest above others, broken international contracts and withdrawn from international treaties, which severely threatened the multilateral mechanism and the international order mankind has built since the Second World War. The international community should take a clear-cut stand to uphold multilateralism, safeguard the purposes and principles of the UN Charter and maintain the basic norms of international relations.

Second, uphold the consensus of solidarity and cooperation, and oppose confrontation. Solidarity and cooperation are the strongest weapon of the international community in fighting the pandemic. However, there is a country that is shifting the blame to other countries and spreading the political virus to cover its own failure amidst the pandemic. It’s also using the pandemic to play the game of political manipulation and incite ideological confrontation in an attempt to launch a new “Cold War”, and this is categorically going against the tide of history. The international community needs to strengthen solidarity and cooperation, take a firm stand on the correct side of history and pronounce a loud objection to actions violating the trend of our times.

Third, uphold the consensus of mutual learning between civilizations, and oppose the creation of barriers. China has always advocated harmony with difference and diversity, and believed that different civilizations should respect and learn from each other and seek common development. Differences in political and social system shall not become barriers to exchanges of different civilizations. The international community must transcend the differences in region, race, history and culture and social systems. Countries must join hands instead of pointing fingers at each other, tear down walls instead of building new ones, stick to cooperation instead of decoupling from one another. Countries across the world must enhance mutual understanding and trust, promote harmonious coexistence, exchanges and mutual learning and common development of different civilizations.

Lianbing Xiao: During the epidemic, economic globalization was questioned. Who put forward the theory of economic globalization under what historical background? How is its development process? In the post-epidemic era, will globalization end? Will economic and trade exchanges between countries be decoupled? What is the development trend of globalization?

Jim O'Neill： These are some very big questions, very big! Lots of profoud thinkers probably have better answers than me, but i want to concentrate on two fallacies that i observe today. It is very fashionable to believe that globalisation is “ over”, and that the last era of it, in any case, was not especially positive. Both are wrong. On the latter, people forget that since the 1990’s there have been hundreds of people taken out of poverty globally, many of which are in China, but there are also tens of millions, perhaps hundreds of millions in the Indian subcontinent, parts of Latin America and Africa, as well as the ex soviet union. And while it is true, that inequalities have risen inside some countries, it is not true-at all- in all countries, and more importantly, on a global basis, it is untrue. None of this would have happened if it weren't for the huge rise in world trade, the advent of technology used all over the world, and crucially, the ongoing provision of consumer goods for consumers everywhere at the most affordable prices society and business can provide. Even though there are unforeseen externatilites, we shouldn’t forget the huge improvements seen. According to the world bank and UN, if the system were to broadly carry on as it had been, Africa would be the only part of the world would have any people in basic poverty by 2030. On the earlier point, while there has been a clear shift in some government’s thinking about globalisation, it is not uniform, and most importantly, the private sector is doing the opposite. Indeed, the remarkable innovation going on to find better treatments, diagnostics and vaccines, amongst pharmaceutical companies all over the world shows you the complete opposite of what so much superficial writing suggests. At this moment in time, consumers ( us, as individuals) want a vaccine, the system is leading to rapid innovation and perhaps the provision of some much more quickly than anyone might have ever thought. This couldn’t happen without huge global co-operation. The same can be observed with the use of technologies. I had never even heard of zoom software in 2019, but it has become a lifeline in 2020, and i personally witness every other day this form of globalisation thriving. Globalisation will only end when consumers don’t want to acquire products that they desire at an affordable price. When is this going to end? I can’t see it.

Ambassador Liu: Economic globalization can date back to the great geological discovery in the 15th century. After WWII more countries and regions participated in the process of globalization. Over the course of this period, the theory of globalization was constantly improved thanks to the contribution of some well-recognized British economists such as Adam Smith and David Ricardo. Since the new century, globalization has entered into an unprecedented stage and has effectively advanced the world economy, in the meantime, as a result of globalization, the polarization between the rich and poor has become more prominent. The coronavirus pandemic has obviously hampered the cross-border flow of personnel, and some western countries are using the pandemic to tout protectionism, and some even say “globalization is dead”. To respond to such claims, I’d like to stress the following points:

First, the trend of economic globalization is irreversible despite the twists and turns it encounters. As an inevitable result and objective requirement of productivity growth, economic globalization is an irreversible historical trend. Like a thousand streams flowing into the big ocean, there is no way they could flow back into separate lakes. As a non-economic factor, the pandemic has caused an adjustment of the global supply and industrial chains, but this is only a normal phenomenon in the process of economic globalization. The general trend of globalization growing against twists and turns hasn’t changed.

Second, the “economic decoupling” pushed by a few countries will lead to a result contrary to their wishes. International exchanges and economic interactions are the objective requirement of world economic development. In the face of the pandemic, some western politicians hold a zero-sum mindset – they tout “economic decoupling” and “bringing back the industrial chain”, which will do no good other than undermining the openness, safety and stability of the global industrial chain. Like milking a bull, these counter-globalization moves go against the law of economics and will eventually backfire.

Third, the problem of globalization can only be solved over the course of developing globalization, and only open and win-win cooperation point the correct path forward. The more problems globalization faces, the more countries should enhance cooperation with openness, seek development with innovation, promote trade and investment freedom, and constantly improve the global value chain, industrial chain and supply chain. Countries must cooperate in technological innovation and result sharing, push economic globalization towards a more open, inclusive, balanced and win-win direction, and contribute to a more open world economy and build a community of shared future for mankind.

Lianbing Xiao: The concept of the BRIC countries was first proposed by Mr. O'Neill and actively promoted. Would you please talk to us about the inspiration behind this concept? Ambassador Liu，What’s your comment on such concept?

Jim O'Neill：The inspiration in some ways was quite simple, and i am sometimes embarrased , it has made me well known in international circles. The specific driver, oddly were the horrible events of 11th September 2001, and the atrocities in New York , Washington DC. I was just in the process of becoming the chief economist of Goldman Sachs having previously been the co-head of economics research, and was trying to find a new concept to help influence the firm and its clients. And below the horror of that day, i concluded, maybe the underlying message was, perhaps this would signal the end of Americanisation of the world. It had seemed to me during the 1990’s as i travelled, the world was becoming more and more the same wherever you went, and it was clear also to me, that some parts of the world didn’t like this. I was also very aware of the huge role China played in helping curtail the Asian crisis in 1997, the emergence of India as a source of global tech servicing, Russia after the fall of the Berlin wall, and i guessed- correctly-that Brazil would persist with inflation targeting under president Lula. It made me realise nearly 3 billion new people were being brought into globalisation, and while it was likely to be more complex, that was the way the world would develop through the next era. Which is broadly what has happened. I never thought it would lead to a political leaders club of the same name, but that of course, helped make the acronym and me, more well known!

Ambassador Liu: First, the concept of BRICS conforms with the trend of history. Lord O’Neill was forward-looking in proposing such concept as he keenly captured the rapid rising of emerging markets. Since the first BRICS Summit in 2009, the total economic volume of BRICS countries has risen from accounting for 12% of global total to today’s 23%. Proportion of BRICS trade to the world’s total increased from 11% to 16%, and BRICS countries now contribute more than 50% of global economic growth. BRICS countries have become an important force driving the evolution of the international landscape.

Second, BRICS cooperation has yielded fruitful result. Over the past more than 10 years, led by leaders’ summit meetings, a multi-layered cooperation framework has been established amongst BRICS countries covering economic and trade, finance, agriculture, education, health and technology. The New Development Bank (NDB) was built as cooperation deepens. Facing the pandemic, BRICS countries actively advocated multilateralism and resolutely supported the important role played by the WHO. They have united in their efforts against the pandemic and demonstrated the BRICS spirit of solidarity and mutual support.

Last but not least, BRICS has a bright development prospect. BRICS cooperation has explored a new diplomatic path that features “dialog instead of confrontation, and partnership instead of alliance”, setting an example for the international community. Looking into the future, BRICS will continue with the mechanism of leaders’ summit, and intensify cooperation in political security, economic and trade, finance, people-to-people exchanges and public health, and jointly advance multilateralism, promote world economic recovery and political solutions to hotspot issues, and shoulder responsibilities for world peace and global development.

Lianbing Xiao: In response to the current China and international situation, the Chinese government has put forward new ideas for economic development. While continuing to participate in the global economic cycle, it will strengthen the internal circulation (supply and circulation) of the Chinese economy. What is your comment on this? Will the Chinese economy bring dividends to the global economy?

Jim O'Neill：I have a very simple strong response to this question. It should be priority number one, two and three for China to make sure its own consumer becomes more and more important, especially as an overall share of the Chinese economy. Not only will this allow more people around the world to actually benefit from China’s emergence as a large economy, but it will also allow a smoother path for development of Chinese society. I often think that many other western observers ignore the implicit deal between China’s 1.3 billion people and its government, and that it is to continue to take more and more of them into higher middle income status. This can now only be done by enabling more Chinese consumption. The simple mathematical translation shows huge impact, and if China were to get its private consumption to 50pct of GDP this decade under circumstances of 7-8pct nominal GDP growth, this will simply be the biggest single contributer to global GDP, plain and simple.

Ambassador Liu: China at present is fostering a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other. This is a paradigm proposed according to China’s development stage, environment and the changing conditions, and is a strategic decision to reshape China’s international cooperation and cultivate new competitive edges. At a time when the world economy faces drastic changes with a pandemic unseen in a century, we need to give full play to China’s enormous domestic market and the great potential of its domestic consumption, and add impetus to China’s economy and drive world economic recovery by smoothing the domestic circulation. The new development paradigm does not refer to an enclosed domestic circulation, rather it’s an open, dual circulation both at home and globally. No matter how the external environment changes, China will unswervingly advance high-level openness, and the open door will only be opened wider. China’s ties with the world will only grow closer, and China will provide even greater opportunities to the world. I believe that the Chinese economy will bring about at least three dividends to the global economy:

First, the dividend of development. China boasts 1.4 billion people, 900 million laborers and 170 million highly educated personnel as well as a middle-income group of more than 400 million people. For 14 consecutive years China has contributed the most to world economic growth. Since the breakout of the pandemic, China has always coordinated epidemic control with social and economic development. The re-opening of the economy has been steadily carried out. China’s economy in the second quarter grew by 3.2%, making it the first major economy of the world to register a positive growth amidst the pandemic. China’s economic recovery will inject major momentum to the global economy.

Second, the dividend of sharing. China is actively implementing the Foreign Investment Law, relaxing market access, optimizing business environment and actively expanding imports and overseas investment. In the meantime, China is ensuring the smooth flow of international logistics and advancing the high-quality development of the Belt and Road Initiative, all of which will bring about enormous opportunities to mutually beneficial cooperation between China and the world. The 2020 China International Fair on Trade in Services (CIFTIS) was successfully held in Beijing, through which China demonstrated to the whole world its unswerving determination and commitment to expanding openness.

Third, the dividend of innovation. At a time when the next round of technological revolution and industrial transformation are in the ascendant, China has already become a major tech power with global influences, and China’s international cooperation in technological cooperation has constantly deepened. According to the World Intellectual Property Organization (WIPO), China ranked 14th in the Global Innovation Index 2020. For two consecutive years, China has ranked top 15 globally. China’s 5G, AI, high-speed railway and mobile payment are booming with vitality. During the pandemic, industries such as “cloud office”, digital economy and medicine and healthcare are growing with strong momentums. China will further benefit the world with its dividend in technological innovation.

Lianbing Xiao：What do you think of the sustainable development of a society?

Jim O'Neill：Let me give you an additional new aspect. When i was at Goldman Sachs, i presided over the creation of something called a global environmental score (GES) for over 180 countries. It was an index of many variables that tried to measure all the forces that drive sustainable growth. What i realised soon after, there was a very high correlation between not GDP growth and GES scores, but wealth and GES scores, and more importantly, often shared wealth. None of us know what happiness is 100 pct, but it does seem the more wealthy countries are, and the more shared that wealth is, the more happy they seem to be. Scandinavian, north European and some north east Asian countries score especially well. And i often like to highlight South Korea, which is the only nation of more than 50 million people in my professional life that has reached the wealth of a European wealthy country, starting at the low level of a typical African country. Other countries, big and small, should try to capture what South Korea has done. You can even see their success in how they handle the pandemic, and actually also in the same year, now winning the famous Oscar nomination for the world’s best film!

Lianbing Xiao: A reflection of the past helps envisioning a splendid future. What are the exciting incidents in China-UK relations since the New China was established?

Ambassador Liu: China-UK relations have traveled an extraordinary journey since the founding of the People’s Republic of China, in general, we’ve witnessed three “historic jumps” in our relations.

The first is the establishment of diplomatic relations at the ambassadorial level. In 1950, the UK was among the first in the west to recognize the People’s Republic of China. In June 1954, diplomatic relations at the chargé d’affairs level was established between the two countries, and this was the world’s first pair of “semi-diplomatic ties”. After a lengthy period of negotiation, the UK eventually came to the recognition that “Taiwan is a province of the People’s Republic of China”. The two officially established ambassadorial-level diplomatic relations on March 13, 1972.

The second is the successful settlement of the Hong Kong issue. In 1984, the Sino-UK Joint Declaration on the Issue of Hong Kong was signed. In 1997, Hong Kong returned to its motherland after being colonized for more than 100 years. The settlement of the Hong Kong issue cleared the historical obstacles standing in the way of China-UK relations, and also set an example for the international community that countries can solve leftover issues from history through peaceful negotiations. I had the privilege of attending the handover ceremony and witnessing this exciting historic moment. Today, there are still some differences between China and the UK on Hong Kong, and it is our wish that the British side can correct its mistakes and make Hong Kong a bridge and bond in China-UK relations, instead of the other way around.

The third is the “golden era” in China-UK relations. Since 1990s, the two countries have entered a stage of comprehensive partnership, and comprehensive strategic partnership. In 2015, President Xi Jinping paid a “super state visit” to the UK, and the two sides committed to building a global comprehensive strategic partnership for the 21st century, which opened the “golden era” for China-UK relations, and injected new vision and momentum to our bilateral ties.

History and reality show that as long as China and Britain abide by the basic norms of international relations, respect each other’s sovereignty and territorial integrity, adhere to the principles of non-interference in each other’s internal affairs, uphold equality and mutual benefit, win-win cooperation, and properly handle differences, the relations between the two countries will continue to develop. Otherwise, it will encounter setbacks and even regression. I hope that China-UK relations can overcome the current difficulties, return to the right track and achieve stable and healthy development for the benefit of the two peoples.

Lianbing Xiao: You have all contributed to the healthy development of China-UK relations. Please talk about the results of your efforts.

Jim O'Neill：I was at the heart of the development of the so-called golden era under the Cameron government, having tried to demonstrate to the prime minister how this could be a win-win situation for both countries. Then, when i joined the government, i had some responsibility for trying to develop this golden relationship, and i was very pleased to be part of the trip with chancellor, George Osborne in autumn 2016 and of course, to help host president xi soon after, on his famous trip to the UK, including to my home town of Manchester. Although unfortunately, he went to visit the other football club, Manchester city! I love Manchester united. Since late 2016, the golden relationship has not really prospered and i sincerely hope, it can be resurrected, because there remain obvious areas of mutual benefit, including education, health, advanced manufacturing, culture, sport and sharing a desire to improve life for the world’s 78 billion plus people.

Ambassador Liu: I’ve served as the Chinese Ambassador to the UK for more than 10 years, over the course of this period our bilateral ties have witnessed significant progress.

First, high-level exchanges are kept in a high momentum. In October 2015, President Xi paid a successful state visit to Britain, the two sides decided to build a global comprehensive strategic partnership for the 21st century, thus opening the “golden era” of China-UK relations. The two countries maintain high-level exchanges and strategic communications through mechanisms such as the annual meeting of prime ministers, economic and financial dialogues, strategic dialogues, people-to-people exchange, and high-level security dialogues.

Second, economic and trade cooperation has continued to deepen. The trade volume of goods between China and Britain jumped from 50.1 billion US dollars in 2010 to 86.3 billion US dollars in 2019. Britain is China’s third largest trading partner in Europe, and China is Britain’s third largest export market for goods. 10 years ago, China’s cumulative direct investment in the UK stood at about 1 billion US dollars, and by the end of 2019, it exceeded 20 billion US dollars, an increase of 20 times. The UK has become China’s largest investment destination in Europe. London has become the second largest offshore RMB settlement center and the largest offshore RMB foreign exchange center in the world. The Shanghai-London Stock Connect pioneered the interconnection between China and overseas capital markets. China-UK cooperation under the “Belt and Road Initiative” is in the ascendant. The British Prime Minister’s Special Envoy attended twice the “Belt and Road Forum for International Cooperation” in China, and the two countries have also signed a third-party market cooperation agreement.

Third, people-to-people exchanges are another highlight of our bilateral ties. At present, about 220,000 Chinese students are studying in Britain, and more than 10,000 British students are studying in China. The “Chinese language wave” is heating up in the UK. The number of Confucius Institutes and Confucius Classrooms in Britain reached 30 and 164 respectively, ranking first in Europe, which is nearly twice as many as that in 2010; More than 190,000 registered students and more than 1.7 million people participated in various cultural activities carried out by Confucius Institutes, and more than 600 British schools now offer Chinese courses. There are 344 China-UK cooperative education projects and 27 cooperative education institutions, involving 139 British universities and 232 Chinese universities and about 80,000 students from both countries. Local exchanges and cooperation have also been continuously expanded. At present, there are 69 pairs of friendship cities between the two countries. China is an important source for tourists visiting Britain. Before the pandemic, there were 168 passenger flights between China and Britain each week, with nearly 2 million people traveling into each other’s country every year, doubling that of 10 years ago.

Fourth, international cooperation has continuously deepened. China and the UK are both permanent members of the UN Security Council and countries with major influences in the world. The two share consensus in safeguarding multilateralism, supporting free trade and opposing protectionism and unilateralism. In the UN, G20, World Trade Organization and under global frameworks, China and the UK are constantly strengthening communication and coordination. We also maintain close communication on international and regional hotspot issues such as climate change, biodiversity, and the Iranian and North Korean nuclear issues.

We are also mindful that China-UK relations have encountered some obstacles and difficulties recently, and the responsibility rests entirely with the UK. A stable and healthy relationship is not only in the common interests of China and the UK, but also conducive to world peace and prosperity. China and Britain now stand at an important juncture. We hope that the UK will return to an independent, rational, and pragmatic policy toward China, meet China halfway, and promote the stability and long-term development of China-UK relations.