Emerging countries need their own model

The three-day Boao Forum for Asia Annual Conference 2014, which starts in Hainan on Tuesday with the theme "Asia's New Future: Identifying New Growth Drivers", is expected to give answers to such questions as how China can deepen reforms and release new institutional dividends.[Special coverage]

In a move to spur economic recovery, developed countries have enforced a series of financial, fiscal, monetary and industrial reforms over the past years since the global financial crisis. A trade and financial cooperation mechanism has also been jointly created to put them in a favorable position in the fierce global competition. Currently, developed countries, particularly the United States, are on the way to a full economic recovery, and a new global economic governance framework led by developed countries and a set of crisis response and economic growth theories have taken shape. Against this backdrop, there is an increasingly prevalent viewpoint in the West that developed countries will soon again act as the locomotives of the world economy.

In contrast, emerging countries have suffered a big setback in their economic development in recent years. Slowed industrial growth, soaring inflation, depreciation of their currencies and accelerated capital outflows have caused a continuous economic deceleration in emerging economies as a whole. Their long-pursued strategy of excessively prioritizing economic growth while ignoring coordinated and balanced development is increasingly unviable and social problems have gradually surfaced that pose major uncertainties to national development. The pressures from the sound recovery of developed economies and their own development bottlenecks make it urgent for emerging countries to push forward sweeping reforms and innovation so that they will not miss a new round of world economic growth.

In recent years, the Boao Forum has continuously strengthened its function of serving emerging economies. With "Identifying New Growth Drivers" as its theme, this year's forum aims to be an open platform for discussions on this topic, offering advice and suggestions, as indicated by almost all of its agendas which tightly encircle how to promote reforms, innovation, development and opportunities.

Emerging countries should first try to push for updates to their development thought in a bid to explore a development model that is suitable for their own national conditions. For example, ways need to be found to avoid social imbalances and ecological deterioration while pursuing high-speed development, and they need to decide to what extent they will implement demand regulation or advocate the market's self-regulatory role. In-depth studies should also be made on how to cultivate the ideas of entrepreneurship and innovation to tap the commercial rewards of technological advances in the 21st century. When it comes to their development model, emerging countries also need to make a choice between the "Washington Consensus" and the "Beijing Model" or other successful development paradigms.

"Only one's feet know whether shoes fit", as President Xi Jinping said when talking about a country's development path. It is up to emerging economies themselves to decide their institutional models and forge a multilateral platform of their own to let their voices be heard. There is no panacea in the world and countries should have tolerance toward the differences of others.

Emerging countries should also try to promote institutional innovations, and on the basis of updated thought push for their implementation. This does not mean emerging countries need to set up new institutions, but means that they need to make appropriate adjustments or revisions to established institutions, or introduce mature practices from abroad to reduce possible policy repercussions and ensure that reforms can proceed smoothly. For example, measures need to be taken in China to adjust the government's role in economic activities and reduce its administrative approval procedures. It is helpful for such a move, which will touch the interests of various parties, to be fully discussed at the Boao forum.

In an era of globalization, a country's institutional innovation will unavoidably have regional and even global effects, and thus it is responsible for emerging countries to talk about their development models at an open platform like the Boao Forum. After all, emerging and developing countries share a common interest in the reform and adjustment of the international governance mechanism, including the building of a trade, financial and monetary cooperation mechanism and the making of cyberspace rules.

Profound reforms will induce profound changes. It is hoped that emerging economies can find a new growth driver and make full use of the new era that can promote innovations and win-win results.