Zhang Xiangcheng, WTO Deputy Director General, on multilateralism

"Why do we need the world know our power? We should all live peacefully and harmoniously, and strive together hand in hand, to make our world a better land."

I just came across an article over WeChat appearing to be a recent commencement speech by Zhang Xiangchen, Deputy Director General of WTO, in the Institute of South-South Cooperation and Development (ISSCAD), Peking University and thought it was sharing.

The ISSCAD has kindly confirmed to me that it was indeed Ambassador Zhang’s speech there on Friday, June 30, and authorized the publishing. Zhang, appointed on 4 May 2021 as one of the four Deputy Directors-General, formerly served as Vice Minister in the Ministry of Commerce of China. He has long and extensive experience on WTO issues, international negotiations, and policy research. Ambassador Zhang served until then as China's Permanent Representative to the WTO and previously as Deputy Permanent Representative.

The idea that China establishes the ISSCAD was initiated and announced by Chinese President XI Jinping during the High-Level Roundtable on South-South Cooperation at the 70th Anniversary Celebration of the United Nations in New York on September 26, 2015. With strong support from the Ministry of Commerce, the Ministry of Education, and the Ministry of Finance, and by virtue of Peking University’s strength in humanities and social sciences, Institute of South-South Cooperation and Development (ISSCAD) was officially established at the National School of Development of Peking University (NSD) on April 29, 2016.

The core faculty of the ISSCAD draws heavily from NSD, which has an established reputation both academically and as a policy think-tank in China, and is also supported synergistically by a scalable network of select faculty and professional (including senior government officials) associates from other schools and departments of Peking University and beyond.

The purpose is to nurture a vibrant interdisciplinary learning environment that encourages intense inquiry, open dialogue, and cross-cultural learning and serves as a bridge between theory and practice. The ISSCAD offers both degree programs and non-degree executive education programs.

Speech at the 2023 graduation ceremony of the Institute of South-South Cooperation and Development

By Zhang Xiangchen, Deputy Director General of WTO

June 30, 2023

Distinguished Prof. Lin Yifu, Dean of the Institute of South-South Cooperation and Development

Distinguished Prof. Yao Yang, Executive Dean of ISSCD

Dear colleagues, ladies, and gentlemen

I am very delighted to attend the graduation ceremony of the Institute of South-South Cooperation and Development of the Peking University. Over the past years, even though I was not in China, I would receive photos of the Institute’s graduation ceremony from my colleagues. It’s always heartening to see the joyful faces of the students and the colleagues of the institute. I would look carefully at each photo and keep them in a collection. Each time, I felt truly delighted for the continuous progress made by the institute.

Seven years ago, I had the honour to be involved in designing and establishing the South-South Institute, and unveiling it together with Professor Lin Yifu right here at the Peking University. I remember that at the unveiling ceremony, representing the foreign aid agency of the Chinese government, I put forward three visions for the Institute: first, to become the most attractive research institution on development studies; second, to become the top-notch training base for high-end talents from developing countries; and third, to become the most vibrant platform for communication and exchange among developing countries.

Seven years have passed, and these three visions are advancing steadily on the right path to becoming a reality. More than 300 students from over 70 countries have achieved remarkable accomplishments, through their studies at the Institute. I have invited some of them to participate in the activities of the World Trade Organization. They shared their perspectives on global trade, as well as their experiences and accomplishments at the Institute with the delegates from other developing countries and received overwhelmingly positive responses.

Professor Lin Yifu once said, the applicability of an economic theory largely depends on the similarity of the environment where it is put into practice. I strongly agree with this statement, and I have often quoted it in international occasions.

China has gone through decades of rapid development, but there is still a long way to go in terms of achieving full-fledged and balanced economic and social development. It is because of the similarities that China shares with the other developing countries – in terms of challenges, aspirations and constraints – we can truly empathize with your goals, needs, and actions. And we share a lot in our understandings, including on the important role that the government needs to play - in formulating strategic plans, implementing industrial policies, and ensuring fair competition.

In addition to that, because we are at different stages of industrialization, we have broad scope for cooperation in the industrial sectors.

I don't know if there are any Bangladeshi students here today, I was in Dhaka in March to attend the Bangladesh Business Summit . I discussed with the Bangladeshi government about the transition arrangement for the country’s graduation from the least developed countries category by 2026.

After the event, I asked the organizers to take me to visit a textile factory, because I had worked in a textile factory in China over 30 years ago. The organizers brought me to a factory producing garments for export. What I saw was modern facilities and up-to-date equipment, and the company is seamlessly integrated into the global market.

Bangladesh is now the world's second-largest exporter of garments, second only to China.

Bangladesh has an ambitious goal, aiming to elevate its per capita GDP to the rank of developed countries by 2041. Some people in Geneva find this goal to be too ambitious. I told them - it took China 17 years to increase its GDP by 10 times from 2000 to 2017, starting from a higher base. So why it’s so hard to imaging Bangladesh increasing its GDP by more than 10 times in 20 years, starting from a relatively lower base?

in the past few years, the global trade presents two features - susceptivity and tenacity. Susceptivity means that when a crisis occurs, trade will respond very sensitively and quickly. However, after the shock, it can quickly return to normal. This tenacity of global supply chains shows that comparative advantage under free trade conditions is still the main consideration in business decision-making. At the same time, I would like to point out that free trade is neither accidental nor should be taken for granted. The WTO estimates that during the epidemic, more than 75% of international trade went on normally. That is because the rules of the multilateral trading system have been working there.

So, the whole international community should adhere to the multilateral trading system, and at same time pursue the WTO reform and update the multilateral rules to keep pace with the times.

There is no doubt that the global economic and trade landscape is undergoing a gradual yet structural change, which inevitably leads to adjustments and redistribution of economic benefits. For the less developed countries, this change represents both opportunities and challenges.

A simulation conducted by WTO economists shows that if decoupling, that is, breaking global trade into two or more distinct blocks, will reduce global GDP by 5% in the long run due to diminished  specialization and technology spillovers, equivalent to roughly $4.4 trillion, before taking into account losses caused by reduced-scale economies, transition costs, resource allocations and other factors .And the WTO economists believe that cost would be borne disproportionately by poorer countries.

The weight of security considerations is rising in decision making. This includes not only the national security and economic security concerns at the government level, but also the supply chain security at the business level. It worth a systematic thinking on how to deal with security issues more effectively in the WTO rule.

Digitization is bringing about significant changes in production and trade. For example, digital technology has blurred the boundaries between goods and services, which brings new opportunities, at same time has further highlighted the problem of the digital divide.

Environmental issues also have an increasing impact on trade. This includes both the impact of climate and the environment on the industry itself, as well as the impact of environmental protection measures on trade. It is foreseeable that the environmental policies will further weight up in the future international supply chain layout.

Competition in the international market is harsh, no one can guarantee the success, but no one should be left behind. In all these uncertainties, there is only one thing that is certain: giving up is no option.

The process of reshaping international rules is also a form of competition. I’ve often told representatives of developing countries in Geneva, "If you are not at the table, you're probably on the menu". These words may sound too straightforward and even blunt, not fitting the profile of a diplomat, but I have to say them because I have seen the gaps in the level of participation in rulemaking by developing countries, and I am deeply concerned that if we don’t take urgent actions, the future rules will be even less favourable to developing countries.

In negotiating trade rules, countries weigh their positions against their defensive and offensive interests. My observation is that defensive interests are usually easy to see, but difficult to achieve, because whatever you put on the table need to be agreed upon by others. For example, developing countries currently face great challenges in obtaining special and differential treatment, because there’re all kinds of efforts to make this deviation meaningless and hard to use. This is what we say in Chinese "knowing is easy but doing is hard".

On the other hand, offensive interests are often more difficult to see and are easily overlooked. But it is the offensive interests that have significant and strategic value, including for developing countries. Once you recognize your offensive interests, it is relatively easier to achieve them, because all you need to do is to bravely embrace global trade, abide by the prevailing international rules, and make necessary domestic policy adjustments to increase trade and investment. This is what we call "knowing is hard but doing is easy".

I mentioned there’re significant gaps in the level of participation by developing countries in rulemaking, but where are those gaps? As we know, they lie in capabilities and knowledge. Therefore, I urge you to put the knowledge and wisdom that you have gained - through studying at Peking University and in China，in particular the theoretical method of the New Structural Economics- into good use when you return home, find appropriate ways to apply them in policymaking, safeguard your defensive interests and pursue offensive interests, embrace economic globalization, make use of the multilateral trading system, and reap the benefits from trade for your country and your people.

I studied at Peking University myself, so in that sense we all share an eternal spiritual home. There is a popular song in recent years, called "Yanyuan Qing", or “Affection for the Yanyuan”. I’m sure you all know that Yanyuan means Peking University. I liked the lyrics in this song: "Red-brick mansions, snow gently bestow, let us strive, to be the heroes in winter's show". This wasn't a song from the time of my school days, but I still really like it.

However, there is another line in the song that says, "Tomorrow, let the trees tower, the world will know our power". I find this line somewhat debatable. Why do we need the world know our power? We should all live peacefully and harmoniously, and strive together hand in hand, to make our world a better land.

When I served as the Chinese Ambassador to the World Trade Organization, we renovated a meeting room in our mission’s building. Two artists from Hunan province, Mr. Wang Jinshi and Mr. Shi Gang kindly offered a joint landscape painting titled "Splendour of the Heng Mountains". They asked me to write an inscription on it. With gratitude, I wrote a line for the painting, which says “The 72 peaks of the Heng, each splendid on its own; only with the underpinning pine groves, they join into a magnificent crown”.

As someone who has been working on multilateral issues for 3 decades, this poem reflects my feeling and belief about the multilateral system. Only by working together, can we achieve our shared goals. I had many visitors to the mission, they saw the painting and the poem, and they all said that it truly embodies the spirit of multilateralism.

Lastly, please allow me to extend warm congratulations to all of you on your graduation. You are about to embark on a new chapter in your professional life, and I hope the days you spent at Peking University will remain cherished memories for years to come. I look forward to collaborating with you, as practitioners of global development and defenders of the multilateralism. (Enditem)