Globalisation at pivot point

Marcos Troyjo, President of the Shanghai-based New Development Bank, said we need to consider what the old normal was. He pointed out that between the fall of Berlin Wall in 1989 to the Great Recession two decades later, the prevailing normal was deep globalisation, with lower barriers to investment and trade being the norm, along with regional economic integration.

This normal has been challenged since the 2008 global recession, with a risk of deglobalisation.

New trends have come to bear, he said, with emerging economies comprising a greater slice of the world’s economy. He pointed out that the Emerging Seven (E7) – Mainland China, India, Russia, Brazil, Mexico, Turkey and Indonesia – have a combined gross domestic product of US$53 trillion, which is driving a reconfiguration of global value chains and supply chains. The mainland is no longer a low-cost country and leads the world in many technologies that will bring change to various sectors. Brazil, meanwhile, exports more to other emerging economies, sending more to Thailand than it does to Italy, Mr Troyjo cited as an example.

Giving special remarks during the opening session, Xiao Yuanqi, Vice Chairman of the China Banking and Insurance Regulatory Commission, said the COVID-19 pandemic has had an extensive impact on people and economies. He was confident the pandemic will end soon and the time had come to think about how to adapt to the post-pandemic era. Governments, for example, would need to consider exiting their proactive stimulus policies.

Economies worldwide needed to curb their sharp inflation rates, he said. Whether transitory or not, inflation was very high globally. The world had had some experience historically, such as in the 1980s when a bout of global inflation was successfully controlled.

There was also a need to restore global supply chains, he said, as disruptions had lasted longer than anticipated.
Mr Xiao said fintech development in the mainland and Hong Kong had been rapid. To facilitate this, the rapidly developing Guangdong-Hong Kong-Macao Greater Bay Area needed many more experts such as actuaries, financial planners and auditors.

Opening the plenary session, Christopher Hui, Secretary for Financial Services and the Treasury of the HKSAR, said Hong Kong had managed its economy well during COVID-19, with growth for last year likely to be 6.4%. The city provided an example of sound pandemic control and economic recovery. There was a need to build resilience into the financial system to allow for recovery, he explained.

In the run-up to the conference, Mary Huen, Chairperson of the AFF 2022 Steering Committee and Executive Director and CEO, Hong Kong, and Cluster CEO of Hong Kong, Taiwan & Macau of Standard Chartered Bank (Hong Kong) Limited, said: “The pandemic has led us to enter the era of the new normal. The world’s economy and businesses are resuming under a new model. Entering 2022, changes in the global landscape continue to deepen, while governments and enterprises in different economies are taking innovative approaches to promote sustainable development. I hope we can see stable growth in the global economy this year.”

Patrick Lau, Deputy Executive Director of HKTDC, noted: “Even though it has been two years since the onset of the pandemic, businesses are still facing all sorts of challenges, and versions of the new normal are continually emerging in different sectors. We must step further ahead to sense the pulse of the market and generate business opportunities. The theme of AFF 2022 is sustainable development, which is a goal shared by everyone touched by the pandemic. We must strive to conserve our natural resources and minimise the impact of climate change.”

Creating connections

In addition to providing valuable updates through some 60 sessions of speeches and discussions, the forum will host AFF Deal Flow Matchmaking Sessions and a fintech exhibition to help participants identify investment opportunities and explore innovative solutions.