The press conference of the annual conference of Financial Street Forum 2023 was held in Beijing, China, November 1, 2023. /CFP
Editor's note: Liu Chunsheng, a special commentator on current affairs for CGTN, is an associate professor at the Central University of Finance and Economics in Beijing. The article reflects the author's opinion, and not necessarily the views of CGTN.
The Financial Street Forum 2023 will be held from November 8 to 10, as an important event in the global financial field, this forum attracted many guests from around the world, including government officials, senior executives of financial institutions, scholars, and experts. They jointly discussed the development trends, challenges, and opportunities of the global financial market. At a critical time for global economic recovery, the forum has strong practical significance and far-reaching implications.
The global financial system faced a multitude of risks in 2023, stemming from various economic and geopolitical factors.
The ongoing war between Ukraine and Russia and the Israeli-Palestinian conflict have had a profound impact on the global economy, causing significant disruptions to supply chains, exacerbating energy price volatility, and heightening geopolitical tensions. These factors have contributed to increased uncertainty and risk aversion among investors, impacting financial markets worldwide.
The persistence of high inflation throughout 2023 has prompted central banks around the world to tighten monetary policy by raising interest rates. While this is necessary to combat inflation, it also raises concerns about slowing economic growth and potential recessionary risks. The delicate balance between curbing inflation and avoiding an economic downturn poses a significant challenge for policymakers.
The tightening of monetary policy has led to higher interest rates, which have increased borrowing costs for businesses and governments. This poses particular risks for countries with high levels of debt, as it can make it more difficult to service their debt obligations and could lead to sovereign debt crises.
Climate change poses a significant long-term risk to the financial system. The transition to a low-carbon economy will require substantial investments and could lead to stranded assets and financial losses for companies and industries that are unable to adapt.
Navigating these risks effectively will require a coordinated global effort to address the underlying economic and geopolitical challenges. International cooperation is crucial in finding holistic solutions that transcend national boundaries and effectively address these challenges. Collaboration enables countries to pool resources, share knowledge, and develop coordinated strategies to mitigate risks, stabilize financial systems, and foster sustainable economic growth.
The 2023 Financial Street Forum will provide an important platform for promoting China's financial reform and opening and boosting global financial cooperation and exchanges. It will contribute Chinese wisdom to the construction of a more open, inclusive, equitable, and beneficial global financial system.
Beijing Financial Street, Beijing, September 29, 2023. /CFP
In an interconnected global economy, financial instability in one country can quickly spread to others. Promoting international financial cooperation helps in strengthening global financial stability by sharing best practices, coordinating regulatory frameworks, and enhancing risk management. Collaboration among central banks, regulatory authorities, and financial institutions increases transparency, facilitates collective action during crises, and reduces the likelihood of contagion.
Economic imbalances, such as trade deficits, currency fluctuations, and debt burdens, can have far-reaching consequences for both developed and developing economies. By promoting international financial cooperation, countries can engage in constructive dialogue to address these imbalances and explore win-win solutions. Cooperation mechanisms like multilateral development banks, regional financial arrangements, and international trade agreements can foster economic integration, reduce disparities, and promote sustainable development.
The digital revolution has transformed the financial landscape, presenting both opportunities and challenges. International financial cooperation is essential to develop common standards, regulatory frameworks, and cybersecurity measures to harness the potential of technology while minimizing risks. Collaboration enables countries to share expertise, exchange information, and develop innovative solutions to address emerging issues such as fintech disruption, cybersecurity threats, and cross-border data flows.
International financial cooperation can play a pivotal role in promoting inclusive growth and sustainable development. By sharing knowledge and resources, countries can address social and economic disparities and promote financial inclusion. Collaboration on issues like climate finance, green investments, and impact investing can mobilize capital for environmentally sustainable projects and promote the transition to a low-carbon economy.
The Financial Street Forum 2023 will serve as a platform for all attending parties. Promoting international financial cooperation during this critical period is crucial to addressing global challenges, strengthening financial stability, mitigating economic imbalances, harnessing technological advancements, and fostering inclusive growth and sustainable development. By coming together and working collectively, countries can effectively navigate the complex and interconnected nature of today's financial landscape, and build a more resilient and prosperous future for all.
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