Emerging-market economies must increase cooperation

Passing more free trade agreements and promoting cooperation are necessary for emerging-market countries to drive their development, says an article of the People's Daily. Excerpt:

As the US Federal Reserve ends its quantitative easing policy and expectations arise that global liquidity will tighten, capital is flowing out of some emerging-market countries on a large scale, aggravating the instability of stock markets and depreciating worldwide currencies. Concerns surface that the Asian financial crisis of the late 1990s will repeat itself.

Yet, compared with the last Asian financial crisis, emerging-market countries now have three factors in their favor.

First, they have enough foreign exchange reserves to cope with a debt crisis now. Second, some foreign capital invested in these countries is for long-term profit. Third, the middle classes in some of these countries are becoming stronger and the main driving force stimulating economic growth.

One big challenge for these countries is the difficult transformation of their economic structure. Under the current global economic and financial order, emerging economies must increase their cooperation, which is not only an important means to boost global recovery, but also vitally important to the overall status of the merging economies.

It will take time and wisdom for the emerging economies to build a fairer global financial order. How the global financial order will evolve will, to a large part, depend on the roles played by the economies in the process.

The emerging economies' increased cooperation is not to set up an independent system, separated from the developed countries. The cooperation among emerging economies will benefit developed countries as well, as all countries' interests integrate together. The cooperation will consolidate the foundation for the world economy's sustainable development.