The global economy is showing "signs of exhaustion" and the best way to reinvigorate growth would be to apply China's proposal at the G20, which gives priority innovation and development within an open economy, a Mexican economist told Xinhua on Thursday.[Special coverage]
For Jesus Valdes, professor of business studies at the Iberoamerican University in Mexico, the current global financial crisis is due to a "structural crisis", which is affecting political and social models.
Therefore, he called for the heads of state of the G20, who met this week in the Turkish city of Antalya, "to start worrying about unequal economic growth".
"This is one of the fundamental causes impacting the slow growth seen around the world," he said.
He acknowledged that recent reforms have sought to boost fiscal transparency, curtail the imbalances created by certain corporations, and to prevent future bank bailouts using public funds.
However, despite these advances, global economic growth remains slow, with financial markets still facing uncertainties, which are worsened by threats of geopolitical challenges.
During the G20 summit, the leaders were committed to boosting global economic growth in light of the Organization for Economic Cooperation and Development's (OECD) recent revising down of its 2015 global growth forecast from 3.3 percent to 2.9 percent.
In order to prevent further erosion, the G20 adopted the OECD's action plan to fight against base erosion and profit shifting, as such practices by multinational corporations cause 100 to 240 billion U.S. dollars to be wiped off tax revenue each year.
"I was surprised that President Xi called on the G20 leaders to urgently find new sources of economic growth. This call must be backed by a search for greater equality," Valdes said.
"In 2016, I believe there must be a complete re-evaluation of growth models," the economist said, adding that the continued economic deceleration next year will be telling.
As for China, Valdes believes that the country will make changes to its economic model to guarantee growth. "If it can maintain its current levels of growth in the future, this will be very important for Latin America, especially for the Southern Cone (a geographic region composed of the southernmost areas of South America covering Argentina, Chile and Uruguay)."
China will host the 2016 G20 summit in the eastern city of Hangzhou on Sept. 4-5, with the theme of "Building an innovative, invigorated, interconnected and inclusive world economy".
