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Globalization Key to World Economy: US Consul General
Hong Kong's experience with globalization was the creation of a vigorous cycle of growth and higher living standards, said Michael Klosson, US consul general in Hong Kong.
Delivering a speech at a luncheon hosted by the Hong Kong General Chamber of Commerce on Thursday, Klosson said that the world economy of the next decades will see the same combination of growth, which features better environmental protection, safer factories, stronger labor protection and job creation.
However, he said, it must be taken into concrete consideration on how to shape globalization if people want to sustain the global process of liberalization and integration.
He also outlined the three main tasks that the experience of recent decades suggested.
First, individual economies must create open, market-based, competitive environments supported by good macroeconomic policies, he said.
Second, economies must put in place sound institutions, governed by law and unhindered by corruption, to help the benefits of growth reach all levels of society, he continued.
"Third, working through international economic institutions, we must find ways to ensure a strong global economic framework that facilitates trade, investment, and capital flows, sets clear rules, promotes transparency, responds quickly and effectively to crises, provides policy guidance and, where appropriate, financial assistance," he added.
He lauded Hong Kong for its outstanding performance in the three aspects, noting that Hong Kong is now a leader in free trade and budgetary responsibility, and Hong Kong sets positives examples in combating corruption and weathering financial crisis.
Klosson said that trade liberalization is essential and that economies can benefit fully from globalization if market signals are fully reported, and not distorted by trade barriers.
"Since the last time the U.S. unemployment rate touched 4 percent, in January of 1970, our economy has grown to more than 9 trillion U.S. dollars, manufacturing output nearly tripled, and 50 million men and women joined the work-force," he said.
"Similarly in Hong Kong, during the same 30-year period, the economy grew from 4 billion U.S. dollars to 158 billion U.S. dollars, and average per capita income grew from 959 U.S. dollars to more than 23,000 U.S. dollars.
"Again, trade and free trade policies were an important engine of this growth: trade went from 143 percent of GDP in 1970 to 223 percent now," he noted.
Klosson stressed the benefits of liberalization and a policy of relying on markets are the best response to globalization, with governments providing legal and regulatory frameworks that facilitate rather than impede the development of markets.
The May 24 vote of the U.S. House of Representative on the Permanent Normal Trade Relations (PNTR) status for China has put in view China's accession to the World Trade Organization, he said.
"It was an enormously helpful development for the U.S.-China relationship as well," he said.
Klosson also voiced the expectation that globalization will bring out the best in the U.S.-Hong Kong relationship by building on their shared commitments to the rule of law, clean government, open flow of information and free market economics.
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