Editor's note: The article is based on an interview with Zhou Mi, Deputy Director of the Institute of America and Oceania at the Chinese Academy of International Trade and Economic Cooperation. 

According to the IMF report, emerging markets in particular face high risks due to rising trade barriers. Just how close economic crisis is approaching to the world, and what should be done before everything is too late, Zhou Mi, Deputy Director of the Institute of America and Oceania at the Chinese Academy of International Trade and Economic Cooperation, explains that the emerging economies are facing two kinds of challenges: “first is cost- cost of trade activities has increased due to trade policies; so they need to cut productions to earn more profits from exports.”

"The second is that the decision-making process since no one knows how long the current mounting trade protectionism situation will last."

Turkey and Argentina, two representatives of the emerging economies, are facing huge capital outflows and currency crashes. Only two weeks ago, Argentina received the biggest bailout package ever in IMF history, a whopping 57.1 billion US dollars to help its struggling economy.

Meanwhile, the US stock market is hitting historic high-levels, indicating that investors are taking risks. But the IMF has warned that “Robust global risk appetite has so far masked the challenges emerging markets may face should global financial conditions suddenly tighten sharply.”

The IMF also points out that the rise of unilateralism and protectionism, particularly in the United States, is hurting everyone in the global supply chain.

Zhou understands the issue beyond the trade field but from the global governance perspective.

While the IMF is calling for speedier reform from emerging economies, Zhou says that they also need to update themselves to suit the changing trade environment and act accordingly, such as the increase in service trade. Reforms on the currency and financial level also need a push on the agenda.

In the process of reform though, there are some principles and values that we should hold on to, as Zhou adds, such as multilateralism and transparency. Risker world economy only calls for more effective regulatory measures.