Editor's note: Zhang Nan, a special commentator for CGTN, is a faculty member at the School of Applied Economics, Renmin University of China. An Zidong, a special commentator for CGTN, is an associate professor at the School of Applied Economics at the Renmin University of China. He previously worked as a senior researcher at the International Monetary Fund. The article reflects the authors' opinions and not necessarily the views of CGTN.

The 2023 Financial Street Forum annual conference is being held from November 8 to 10 in downtown Financial Street, Beijing. As highlighted in the Report to the 20th National Congress of the Communist Party of China, "China plays an active part in the reform and development of the global governance system. It pursues a vision of global governance featuring shared growth through discussion and collaboration. China upholds true multilateralism, promotes greater democracy in international relations, and works to make global governance fairer and more equitable."

The current world economy faces many difficulties: The global economy remains sluggish while fluctuating frequently; developing countries are confronted with poverty while the developed suffer inequalities; the anti-globalization keeps rising and global climate change is an increasingly severe problem. Each of these issues has become demanding for countries to deal with because of the lack of effective policies or appropriate instruments. This leads to the fact that the global economy has not recovered comprehensively at a relatively stable pace. The growth rate has slowed drastically, worsened by various external impacts in the past decade.

As a longstanding global issue, economic governance faces challenges from governance deficit. Under an open economy, any country's macroeconomic policy will work domestically and internationally through market connections and policy spillover. From a global perspective, macroeconomic policies serve as public goods with potential positive or negative externalities. With enormous global economic challenging issues and limited room for traditional approaches, we should forge international policy synergy to make a bigger cake and ensure fair allocation, which remains a crucial concern in current international cooperation.

With growing overall national strength and international influence, China has grown from a recipient of international rules to a participant in rule-making. International policy synergy becomes even more significant as the global order is crippled by the governance deficit. Thus, China needs to shoulder greater responsibility in the reform and development of the global governance system and work to make global governance more equitable.

Seen from the natural order of development, labor input contributes most to a country's economic growth at the early stage with relatively deficient capital and technology. As it grows into a developing country, labor costs increase while its marginal output decreases. Thus, reliance on capital gradually rises, which calls for more external investment, often accompanied by foreign investment. At this stage, the economy tends to be caught in the middle-income trap, and whether it can stride over the risk and enter the ranks of developed countries depends mainly on technological progress, human capital accumulation, and a series of institutional factors.

Concerning opening up, it is often the commodity market that opens first. Countries complement each other through international trade before they plan industries and domestic production maps based on their comparative advantages. As current cooperation in international trade has matured considerably, the next step will be opening the financial market.

For one thing, international trade requires the construction and constant improvement of the global settlement system to meet the transaction needs; for another, the expansion of business has triggered a longing for international mutual investment for optimization of cross-border production factor allocation and capital flow to areas with higher marginal returns and output.

In the process of opening up, especially for the financial market, one nation's economic fluctuations and policy changes will affect others and be influenced correspondingly. Therefore, we should consider coping with international shocks while enjoying the opportunities and benefits of openness. This calls necessity for cooperation from different fields.

Experts from various fields gather together in the Financial Street Forum to discuss how to strengthen the function of Financial Street as the National Financial Management Center, establish a leading position in asset management featuring wealth management industrial agglomeration, and foster a new "dual circulation" development paradigm.

Besides, they focus on building efficient and sustainable multilateral institutions and cooperation platforms of fairness and justice to enhance policy interactions and enrich the global policy pool, promoting harmonious and win-win worldwide development and constructing a human community with a shared future.

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